Midwood Investment signs $11M acquisition loan for mixed-use in Lenox Hill

Midwood Investment & Development through the entity 829 Madison We Tic Owner LLC as borrower signed a acquisition loan with lender Valley National Bank through the entity Valley National Bank valued at $11 million for the mixed-use building at 829 Madison Avenue in Lenox Hill, Manhattan.
The deal closed on June 9, 2022 and was recorded on June 24, 2022.The property has 8,505 square feet of built space and 11,745 square feet of additional air rights for a total buildable of 20,250 square feet according to PincusCo analysis of city data. The loan price per built square foot is $1,293 and the price per buildable square foot is $543 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 owner bought the property on January 28, 2022, for $17 million. The signatory for Midwood Investment & Development was John Usdan. The signatory for Valley National Bank was Alfred Sorrentino, Jr.. John Usdan is the president of Midwood Investment and Development. https://www.linkedin.com/in/john-usdan-19563714/

Prior sales and revenue

The 8,505-square-foot property generated revenue of $1.5 million or $172 per square foot, according to the most recent income and expense figures.

The property

The 829 Madison Avenue parcel has frontage of 27 feet and is 75 feet deep with a total lot size of 2,025 square feet. The zoning is C5-1 which allows for up to 4 times floor area ratio (FAR) for commercial and up to 10 times FAR for residential with inclusionary housing. The property is in the Upper East Side Historic District. The city-designated market value for the property in 2022 is $6.6 million.

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 Lenox Hill, the majority, or 56 percent of the 91.2 million square feet of commercial built space are residential elevator buildings, with specialty buildings next occupying 17 percent of the space. In sales, Lenox Hill has the 3rd highest sale turnover among other neighborhoods in the city with $2.2 billion in sales volume in the last two years. For development, Lenox Hill has had very little major development activity relative to other neighborhoods.It had 436,108 square feet of commercial and multi-family construction under development in the last two years, which represents 0.48 percent of the neighborhood’s built space. There were two pre-foreclosure suit filed among other mixed-use buildings in the past 12 months.

The block

On this tax block, PincusCo has identified the owners of five of the 14 commercial properties representing 62,962 square feet of the 169,242 square feet. The largest owner is Reuben Brothers, followed by JSRE Acquisitions and then Akris. There are no active new building construction projects on this tax block.

the majority, or 82 percent of the 1.2 million square feet of built space are residential elevator buildings, with 1-4 family buildings next occupying 7 percent of the space.

The borrower

The PincusCo database currently indicates that Midwood Investment & Development owned at least three commercial properties with 168,559 square feet and a city-determined market value of $47.6 million. (Market value is typically about 50% of actual value.) The portfolio has $77.7 million in debt, borrowed from MetLife and Valley National Bank. Within the portfolio, the bulk, or 84 percent of the 168,559 square feet of built space are elevator properties, with industrial properties next occupying 11 percent of the space. The bulk, or 89 percent of the built space, is in Manhattan, with Brooklyn next at 11 percent of the space.

Surrounding

Within a 400-foot radius of 829 Madison Avenue, Pincusco identified 25 commercial real estate items of interests occurred over the past 24 months.
Of those 25 items, one was for major renovation including a certificate of occupancy change. It was an initial temporary certificate of occupancy issued on March 12, 2021 for the $636,207 renovation of 300,150-square-foot R-2 building with 65 residential units at 851 Madison Avenue.
Of those 25 items, 18 were sales above $5 million totaling $419.7 million. The most recent of the 18 was Haim Chera which bought three condo units in the 6,045-square-foot, 69-unit mixed-use building (RM) on 15 East 69th Street and zero other properties for $26 million from Terry Allen Kramer on April 4, 2022.
Of those 25 items, six were loans above $5 million totaling $108.6 million. The most recent of the six was Lsj68 LLC which borrowed $12.7 million from First Republic Bank secured by two condo units in the 4,597-square-foot, 32-unit mixed-use building (RM) on 11 East 68th Street on May 10, 2022.

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