PBC USA Real Estate signs $315M senior loan with JPMorgan for 452 Fifth Avenue in Grand Central

PBC USA Real Estate through the entity 452 Fifth Owners LLC as borrower signed a senior loan with lender JPMorgan Chase valued at $315 million for two office properties including the office building (O4) at 452 5th Avenue in Grand Central, Manhattan and office building (O3) at 1 West 39th Street in Grand Central, Manhattan. The total loan was $385 million, The Real Deal reported, and came after a deal to sell the building to Innovo Property Group collapsed.
The deal closed on July 1, 2022 and was recorded on July 19, 2022. The two properties have 739,442 square feet of built space according to PincusCo analysis of city data. The loan price per built square foot is $425 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.)

This loan contains $35 million in construction funding. Eliyahu Elefant is the CEO of PBC USA.  Baruch Itzhak is the CFO.

Because multiple properties have been transacted, some of the following sections will follow the property with the largest assessed value, which in this case, is the property on 452 5th Avenue.

Prior sales and revenue

The two properties with a total of 739,442 square feet of built space generated revenue of $76.2 million per year or $103 per square foot.

The property

The 452 5th Avenue parcel has frontage of 197 feet and is 185 feet deep with a total lot size of 32,834 square feet. The lot is irregular. 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 $283 million.
The 1 West 39th Street parcel has frontage of 116 feet and is 98 feet deep with a total lot size of 11,520 square feet. The zoning is M1-6 which allows for up to 10 times floor area ratio (FAR) for manufacturing The city-designated market value for the property in 2022 is $27.8 million.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the properties since September of 2020. In addition, according to city public data, the properties have received seven DOB violations and $5,000 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 Grand Central, the majority, or 80 percent of the 43.9 million square feet of commercial built space are office buildings, with hotel buildings next occupying 8 percent of the space. In sales, Grand Central has 2.7 times the average sales volume among other neighborhoods with $875.4 million in sales volume in the last two years and is the 16th highest in Manhattan. For development, Grand Central has 1.4 times the average amount of major developments relative to other neighborhoods and is the 18th highest in Manhattan. It had 1.4 million square feet of commercial and multi-family construction under development in the last two years, which represents 3 percent of the neighborhood’s built space.

The block

On the tax block of 452 5th Avenue, PincusCo has identified the owners of seven of the 39 commercial properties representing 128,459 square feet of the 2,280,550 square feet. The largest owner is John H.K. Belt, followed by Kendor Development and then Allied Partners.

The majority, or 88 percent of the 2 million square feet of built space are office buildings, with hotel buildings next occupying 6 percent of the space.

Surrounding

Within a 400-foot radius of 452 5th Avenue, Pincusco identified eight commercial real estate items of interests occurred over the past 24 months.
Of those eight items, four were sales above $5 million totaling $368.1 million. The most recent of the four was RFR Holding which bought the 220,413-square-foot, 68-unit office building (O4) on 473 5th Avenue for $291 million from Nuveen on May 24, 2022.
Of those eight items, four were loans above $5 million totaling $372.8 million. The most recent of the four was HFZ Capital Group which borrowed $22.8 million from Allied Capital and Development secured by 14 condo units in the 4,202-square-foot, 59-unit mixed-use building (RM) on 16 West 40th Street on June 28, 2022.

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