Optimum Asset signs $44.6M construction loan with Madison Realty for Lower East Side development

Optimum Asset Management through the entity 222 East Broadway Property Owner, LLC as borrower signed a new construction loan with lender Madison Realty Capital through the entity East Broadway Lender 1 LLC valued at $44.6 million for three properties including the specialty building at 228 East Broadway in Lower East Side, Manhattan, specialty building at 226 East Broadway in Lower East Side, Manhattan, and development building at 232 East Broadway in Lower East Side, Manhattan.
The deal closed on November 30, 2021 and was recorded on January 12, 2022. The prior lender was Madison Realty Capital which held debt that had an original loan amount of $35 million.

This project was previously led by the Ascend Group.

The signatory for Optimum Asset Management was Matthew Barry. The signatory for Madison Realty Capital was Brian Shatz.
Over the past five years, there have been 8 NYC Department of Buildings permit applications filed for this parcel valued at more than $20,000. Of those there was one major renovation application including a certificate of occupancy change (A1) filed with a total estimated value of $7.2 million. There were 7 renovation/alteration projects (A2) applied for with a total estimated value of $2.1 million. One of the projects were to change the building from a H-2 to a R-2and change the number of residential units from 18 to 10 and were permitted on July 21, 2020.
Simultaneously with this construction loan, Madison Realty Capital provided an $8 million mezzanine loan that is unrecorded. Barry is a managing director and head of US operations at Optimum.
In Lower East Side, the majority, or 60 percent of the 33.2 million square feet of built space are residential elevator buildings, with residential walkup buildings next occupying 15 percent of the space. In sales, Lower East Side has 2.5 times the average sales volume in the city with $677.8 million in sales volume in the last two years and is the 18th highest in Manhattan. For development, Lower East Side has 2.4 times the average amount of major developments relative to other neighborhoods and is the 9th highest in Manhattan. It had 2.2 million square feet of commercial construction under development in the last two years, which represents 7 percent of the neighborhood’s built space.
On the tax block, the majority, or 94 percent of the 1.1 million square feet of built space are residential elevator buildings, with specialty buildings next occupying 4 percent of the space.
Within a 400-foot radius of 228 East Broadway, PincusCo identified three commercial real estate items of interests occurred over the past 24 months.
Of those three items, one was in new building development. It was a new building permit issued on March 1, 2021 for a 84,717-square-foot R-2 building with 52 residential units at 232 East Broadway.
Of those three items, two were loans above $5 million totaling $121.8 million. The most recent of the two was Seward Park Co-op which borrowed $115 million from ORIX Real Estate Capital secured by the 1,054,290-square-foot, 880-unit co-op (D4) on 409 Grand Street and two other properties on December 30, 2021.

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