Masterworks Development signs $60M refi for hotel in Grand Central, up from $50M

Masterworks Development through the entity 451 Property LLC as borrower signed a refi loan with lender AllianceBernstein through the entity AB Commercial Real Estate Debt Fund IV, Sicav-Sif, valued at $60 million for the hotel condo occupied by Club Quarters Hotels at 128 East 45th Street, with an alternate address at 451 Lexington Avenue, in Grand Central, Manhattan.
The deal closed on May 7, 2024 and was recorded on May 10, 2024. The prior lender was AB CarVal Investors which held debt that had an original loan amount of $50 million. AB CarVal Investors is an affiliate of AllianceBernstein.
The property has 105,626 square feet of built space according to a PincusCo analysis of city data. The loan price per built square foot is $568 per the PincusCo analysis. (The price per square foot analysis is the transaction price divided by square feet as reported in public records and assumes no air rights have been sold.)
The signatory for Masterworks Development was Alvaro Bolivar. The signatory for AllianceBernstein was Marguerite Brogan.

The property

The hotel condo in Grand Central has 105,626 square feet of built space according to a PincusCo analysis of city data. The parcel has a total lot size of 105,626 square feet. The city-designated market value for the property in 2022 is $29.3 million. The most recent loan totaled $50 million and was provided by AB CarVal Investors on May 21, 2021.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the property for the past 24 months. In addition, according to city public data, the property has not received any significant violations in the last year.

Development

For the tax lot building, it received its initial certificate of occupancy on August 16, 2013. There are no active new building construction projects or major alteration projects with initial costs more than $1 million on this tax lot.

The neighborhood

In Grand Central, The majority, or 83 percent of the 43.5 million square feet of commercial built space are office buildings, with hotel buildings next occupying 8 percent of the space. In sales, Grand Central has 3.1 times the average sales volume among other neighborhoods with $859.2 million in sales volume in the last two years and is the 10th highest in Manhattan. For development, Grand Central has 3.5 times the average amount of major developments relative to other neighborhoods and is the 8th highest in Manhattan. It had 3.9 million square feet of commercial and multi-family construction under development in the last two years, which represents 9 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of four of the nine commercial properties representing 463,866 square feet of the 1,267,114 square feet. The largest owner is Yoram Avner, followed by Pan Am Equities and then Marx Realty.
On the tax block, there was one new building construction project filed totaling 35,622 square feet. It is a 35,622 square-foot business (B) building submitted by Todd Polakoff with plans filed November 14, 2017 and it has not been permitted yet.

The majority, or 88 percent of the 1.3 million square feet of built space are office buildings, with elevator buildings next occupying 6 percent of the space.

The borrower

The PincusCo database currently indicates that Masterworks Development owned at least two commercial properties in New York City with 240,232 square feet and a city-determined market value of $57.8 million. (Market value is typically about 50% of actual value.) The portfolio has $186 million in debt, with top three lenders as Bank of China, Carval Investors, and M&T Bank respectively. Within the portfolio, all identified are hotel properties. They are all located in Manhattan.

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