Midtown Equities signs $45M refi loan with Signature Bank for office in Brooklyn Heights

Midtown Equities through the entity 205 Montague LLC as borrower signed a refi loan with lender Signature Bank through the entity Signature Bank valued at $45 million for the office building (O5) at 205 Montague Street in Brooklyn Heights, Brooklyn.
The deal closed on August 3, 2022 and was recorded on August 31, 2022. The prior lender was M&T Bank which held debt that had an original loan amount of $40 million. The property has 76,041 square feet of built space and 116,462 square feet of additional air rights for a total buildable of 192,500 square feet according to PincusCo analysis of city data. The loan price per built square foot is $591 and the price per buildable square foot is $233 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 Midtown Equities was Jack Cayre. The signatory for Signature Bank was Kenneth A. Stagnari.

Prior sales and revenue

The 76,041-square-foot property generated revenue of $4.5 million or $59 per square foot, according to the most recent income and expense figures.

The property

The 205 Montague Street parcel has frontage of 238 feet and is 161 feet deep with a total lot size of 19,250 square feet. The lot is irregular. The zoning is C6-4 which allows for up to 10 times floor area ratio (FAR) for commercial and up to 10 times FAR for residential with inclusionary housing. The city-designated market value for the property in 2022 is $23.1 million.The most recent loan totaled $40 million and was provided by M&T Bank on June 30, 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 not received any significant violations in the last year.

Development

There are no active new building construction projects or major alteration projects with initial costs more than $5 million on this tax lot.

The neighborhood

In Brooklyn Heights, the bulk, or 26 percent of the 12 million square feet of commercial built space are office buildings, with elevator buildings next occupying 22 percent of the space. In sales, Brooklyn Heights has near average sales volume among other neighborhoods with $321.2 million in sales volume in the last two years and is the 18th highest in Brooklyn. For development, Brooklyn Heights has had very little major development activity relative to other neighborhoods.It had 313,837 square feet of commercial and multi-family construction under development in the last two years, which represents 3 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of 16 of the 21 commercial properties representing 467,989 square feet of the 569,213 square feet. The largest owner is Jonathan Rose Companies, followed by Midtown Equities and then Treeline Companies.
There is one active new building construction project totaling 134,794 square feet. It is a 90-unit, 134,794-square-foot R-2 building developed by Michael Daly with plans filed July 1, 2015 and permitted April 19, 2017.

The majority, or 50 percent of the 330,866 square feet of built space are elevator buildings, with office buildings next occupying 41 percent of the space.

The borrower

The PincusCo database currently indicates that Midtown Equities owned at least four commercial properties in New York City with 246,738 square feet and a city-determined market value of $76.3 million. (Market value is typically about 50% of actual value.) The portfolio has $255.5 million in debt, with top three lenders as ACORE Capital, Centennial Bank, and M&T Bank respectively. Within the portfolio, the bulk, or 64 percent of the 246,738 square feet of built space are specialty properties, with office properties next occupying 31 percent of the space. The bulk, or 64 percent of the built space, is in Manhattan, with Brooklyn next at 36 percent of the space.

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