Maverick buys $110M note secured by Chetrit Group’s Garment District hotel project

Maverick Real Estate Partners through the entity Penn District Hotel LLC bought a note with an original principal of $110 million from Arbor Realty Trust secured by Chetrit Group’s midblock hotel project at 255 West 34th Street in Garment District, Manhattan.
The deal closed on May 11, 2022 and was recorded on May 31, 2022.
The owner bought the property on December 17, 2015, for $20 million.
Commercial Observer first reported the note sale, which identified Cushman & Wakefield’s Adam Spies, Lauren Kaufman and Daniel O’Brien as the debt brokers.

The property

The 255 West 34th Street parcel has frontage of 79 feet and is 98 feet deep with a total lot size of 7,883 square feet. The city-designated market value for the property in 2022 is $8.2 million.The most recent loan totaled $71 million and was provided by Arbor Realty Trust on January 28, 2020.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the property since September of 2020. In addition, according to city public data, the property has received three DOB violations, $27,560 in ECB penalties, and $41,960 in OATH penalties in the last year.

Development

On these lots, there is one active new building construction project for a 300-unit, 157,517-square-foot R-1 building. The project was developed by Meyer Chetrit with plans filed April 5, 2016 and permitted November 15, 2019.

The neighborhood

In Garment District, the majority, or 69 percent of the 53 million square feet of commercial built space are office buildings, with hotel buildings next occupying 12 percent of the space. In sales, Garment District has 4.1 times the average sales volume among other neighborhoods with $1.1 billion in sales volume in the last two years and is the 9th highest in Manhattan. For development, Garment District has had very little major development activity relative to other neighborhoods.It had 561,900 square feet of commercial and multi-family construction under development in the last two years, which represents 1 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of 11 of the 27 commercial properties representing 244,287 square feet of the 2,105,855 square feet. The largest owner is General Leasing & Management, followed by Churchill Real Estate Holdings and then Vornado Realty Trust. There are five active new building construction projects totaling 273,414 square feet. The largest is a 300-unit, 157,517-square-foot R-1 building developed by Meyer Chetrit with plans filed April 5, 2016 and permitted November 15, 2019. The second largest is a 180-unit, 45,026-square-foot R-1 building developed by Isaac Hager with plans filed January 6, 2014 and it has not been permitted yet.

The majority, or 78 percent of the 2.1 million square feet of built space are office buildings, with hotel buildings next occupying 10 percent of the space.

Surrounding

Within a 400-foot radius of 255 West 34th Street, PincusCo identified three commercial real estate items of interests occurred over the past 24 months.
Of those three items, two were for major renovation including a certificate of occupancy change. They were one permit applications with a total initial cost of $4.1 million and one permit with a total initial cost of $15.2 million. The most recent of these two items was the filing on September 10, 2021 for a 1,871,482-square-foot B building with zero residential units at 1 Penn Plaza.
One of those three items was a loan which SHEL Capital borrowed $18 million from First Republic Bank secured by the 106,810-square-foot, 13-unit office building (O6) on 225 West 35th Street on November 18, 2021.

Direct link to Acris document. link