O’Connor Capital, CBRE fund sign $34.6M initial loan with JPMorgan Chase for industrial in Sunset Park

O’Connor Capital Partners and CBRE Investment Management through the entity USLP Sunset Park, LLC as borrower signed an initial loan with lender JPMorgan Chase valued at $34.6 million for the industrial building (E1) at 5110-5112 2nd Avenue in Sunset Park, Brooklyn.
The deal closed on September 12, 2022 and was recorded on September 15, 2022. The prior lender was Capital One which held debt that had an original loan amount of $23.8 million.The property has 187,465 square feet of built space according to PincusCo analysis of city data. The loan price per built square foot is $184 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 December 23, 2021, for $85 million. The signatory for O’Connor Capital Partners and CBRE Investment Management was Mary Lang.

Prior sales and revenue

The 187,465-square-foot property generated revenue of $4.2 million or $23 per square foot, according to the most recent income and expense figures.

The property

The 5110-5112 2nd Avenue parcel has frontage of 200 feet and is 449 feet deep with a total lot size of 89,400 square feet. The lot is irregular. The zoning is M3-1 which allows for up to 2 times floor area ratio (FAR) for manufacturing The city-designated market value for the property in 2022 is $15.6 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 received one DOB violation, $16,250 in ECB penalties, and $16,250 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 $5 million on this tax lot.

The neighborhood

In Sunset Park, the bulk, or 31 percent of the 33.7 million square feet of commercial built space are industrial buildings, with specialty buildings next occupying 24 percent of the space. In sales, Sunset Park has 1.4 times the average sales volume among other neighborhoods with $475.9 million in sales volume in the last two years and is the 11th highest in Brooklyn. For development, Sunset Park has had very little major development activity relative to other neighborhoods.It had 765,778 square feet of commercial and multi-family construction under development in the last two years, which represents 2 percent of the neighborhood’s built space. There was one pre-foreclosure suit filed among other industrial buildings in the past 12 months.

The block

On this tax block, PincusCo has identified the owners of one of the two commercial properties representing 187,465 square feet of the 237,121 square feet. The identified owner is O’Connor Capital Partners.
There are no active new building construction projects on this tax block.

all properties are industrial.

The borrower

The PincusCo database currently indicates that Cbre Investment Management owned at least two commercial properties in New York City with 665,733 square feet and a city-determined market value of $39.4 million. (Market value is typically about 50% of actual value.) Within the portfolio, all identified are industrial properties. They are all located in Brooklyn.
The PincusCo database currently indicates that O’Connor Capital Partners owned at least two commercial properties in New York City with 331,435 square feet and a city-determined market value of $47.8 million. (Market value is typically about 50% of actual value.) Within the portfolio, the bulk, or 57 percent of the 331,435 square feet of built space are industrial properties, with elevator properties next occupying 43 percent of the space. The bulk, or 57 percent of the built space, is in Brooklyn, with Queens next at 43 percent of the space.

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