MSD Partners buys $15M loan secured by Midtown East retail

The entity Yeung Chi Shing Holding and Kingsville Investments through the entity 595 Fifth Avenue Inc. as borrower signed a loan modification on a $15 million loan with HSBC Bank, and then the bank immediately assigned the loan to lender MSD Partners, secured by the retail building (O5) at 595 Fifth Avenue in Midtown East, Manhattan.

MSD Partners is a division of BDT & MSD Partners.
The deal closed on November 9, 2023 and was recorded on November 17, 2023. The prior lender was HSBC Bank which held debt that had an original loan amount of $15 million, originally provided in 2013.
The property has 10,000 square feet of built space and 10,000. The loan price per built square foot is $1,500.
The signatory for Yeung Chi Shing Holding and Kingsville Investments was Wendy Kan.
Petitioner and Kingsville are both wholly owned by Yeung Chi Shing Holding, Inc., a Delaware corporation.

Michael Dell, through DFO Management (formerly known as MSD Capital) and MSD Partners, which invests on behalf of Michael Dell and other firm investors, has been actively lending in New York City over the past several years.

MSD Partners is an affiliate of BDT & MSD Partners, which is a merchant bank run by Byron Trott and Gregg Lemkau, and formed from Trott’s BDT & Company and MSD Partners, which was formed in 2009 to invest for Michael Dell, his family and other investors.

The property

The retail building in Midtown East has 10,000 square feet of built space. The parcel has frontage of 20 feet and is 100 feet deep with a total lot size of 2,000 square feet. The zoning is C5-3 which allows for up to 15 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 $30.7 million.

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 four DOB violations and $1,980 in OATH penalties in the last year.

Development

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 Midtown East, The majority, or 81 percent of the 62.6 million square feet of commercial built space are office buildings, with hotel buildings next occupying 7 percent of the space. In sales, Midtown East has the 2nd highest sale turnover among other neighborhoods in the city with $3.7 billion in sales volume in the last two years. For development, Midtown East is the 2nd most active neighborhood among other neighborhoods. It had 19.4 million square feet of commercial and multi-family construction under development in the last two years, which represents 31 percent of the neighborhood’s built space. There was one pre-foreclosure suit filed among other retail buildings in the past 12 months.

The block

On this tax block, PincusCo has identified the owners of eight of the 20 commercial properties representing 1,484,096 square feet of the 2,546,047 square feet. The largest owner is Solil Management, followed by SL Green Realty and then Silk & Halpern Realty Associates.
On the tax block, there was one new building construction project filed totaling 285,606 square feet. It is a 285,606 square-foot business (B) building submitted by Albert Sanfilippo with plans filed June 30, 2022 and it has not been permitted yet.

The majority, or 93 percent of the 2.5 million square feet of built space are office buildings, with retail buildings next occupying 5 percent of the space.

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