Mitsui Fudosan buys $1.6B loan secured by Hudson Yards tower it co-owns with Related, Oxford

Mitsui Fudosan through the entity MFA Finance II LLC bought a loan with an original principal of $1.627 billion from a group of lenders including Wells Fargo, Sumitomo Mitsui Banking Corporation, Deutsche Bank, HSBC Bank and Bank of China secured by the office tower 50 Hudson Yards, located in Hudson Yards in Manhattan, and owned by Mitsui Fudosan, Related Companies, and Oxford Properties Group.
According to loan transfer documents, “This assignment is made without any recourse to Assignor and is made to and accepted by Assignee without covenant, warranty, or representation by Assignor, except as otherwise expressly set forth in that certain Loan Sale Agreement as of the date hereof by and between Assignor, as ‘Existing Agent’, the parties named therein as ‘Seller’, as seller, and Assignee, as buyer.”
The deal closed on October 30, 2023 and was recorded on November 16, 2023.

The property has 2,907,315 square feet of built space according to a PincusCo analysis of city data.
The signatory for Mitsui Fudosan, Related Companies, and Oxford Properties Group was Andrew Cantor.

Mitsui Fudosan bought the loans from a syndication including Wells Fargo. The individual packages of debt were provided between 2017 and 2022.

The property

The office building in Hudson Yards has 2,907,315 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 197 feet and is 350 feet deep with a total lot size of 69,125 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 $1 billion. The most recent portio of the loan totaled $348.8 million and was provided by Wells Fargo on September 22, 2022.

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 received 13 DOB violations, $22,500 in ECB penalties, and $60,950 in OATH penalties in the last year.

Development

On the lot, there was one new building construction project for a 2,244,998 square-foot office (B) building. The project was submitted by Related Companies and filed by Andrew Cantor with plans filed December 22, 2016 and permitted July 3, 2018.

The neighborhood

In Hudson Yards, The majority, or 59 percent of the 16.8 million square feet of commercial built space are office buildings, with elevator buildings next occupying 22 percent of the space. In sales, Hudson Yards has near average sales volume among other neighborhoods with $392.4 million in sales volume in the last two years and is the 29th highest in Manhattan. For development, Hudson Yards has 2.2 times the average amount of major developments relative to other neighborhoods and is the 13th highest in Manhattan. It had 2.2 million square feet of commercial and multi-family construction under development in the last two years, which represents 13 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of three of the three commercial properties representing 4,085,955 square feet of the 4,085,955 square feet. The two identified owners are Related Companies and Oxford Properties Group.
On the tax block, there were two new building construction projects totaling 3,363,277 square feet. The largest is a 2,244,998 square-foot business (B) building submitted by Related Companies and filed by Andrew Cantor with plans filed December 22, 2016 and permitted July 3, 2018. The second largest is a 1,118,279 square-foot business (B) building submitted by Related Companies and filed by Hagen Scutt with plans filed February 19, 2014 and permitted January 21, 2015.

The majority, or 100 percent of the 4.1 million square feet of built space are office buildings, with development buildings next occupying 0 percent of the space.

The borrower

The PincusCo database currently indicates that Related Companies owned at least 177 commercial properties with 9,555 residential units in New York City with 21,530,381 square feet and a city-determined market value of $6 billion. (Market value is typically about 50% of actual value.) The portfolio has $4.7 billion in debt, with top three lenders as Wells Fargo, Carlyle Group, and Deutsche Bank respectively. Within the portfolio, the bulk, or 45 percent of the 21,530,381 square feet of built space are elevator properties, with office properties next occupying 30 percent of the space. The bulk, or 60 percent of the built space, is in Manhattan, with Bronx next at 24 percent of the space.
The PincusCo database currently indicates that Oxford Properties Group owned at least two commercial properties in New York City with 3,357,191 square feet and a city-determined market value of $1.5 billion. (Market value is typically about 50% of actual value.) Within the portfolio, all identified are office properties. They are all located in Manhattan.
The PincusCo database currently indicates that Mitsui Fudosan owned at least one commercial property with 112 residential units in New York City with 350,695 square feet and a city-determined market value of 0.0. (Market value is typically about 50% of actual value.) The portfolio consists of at least a single D8 property. It is located in Manhattan.

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