PH Realty Capital signs $89.5M refi loan with Rialto for 13 residential walkup properties in Hell’s Kitchen

PH Realty Capital through the entity 309w54 Owner LLC as borrower signed a refi loan with lender Rialto Capital Management through the entity Fs Creit Originator LLC valued at $89.5 million for 13 residential walkup properties including the midblock 45-unit residential walkup building at 448-452 West 57th Street in Hell’s Kitchen, Manhattan, midblock 40-unit residential walkup building at 418 West 56th Street in Hell’s Kitchen, Manhattan, and midblock 24-unit residential walkup building at 404 West 56th Street in Hell’s Kitchen, Manhattan.
The deal closed on May 13, 2022 and was recorded on June 6, 2022. The prior lender was Bethpage Federal Credit Union which held debt that had an original loan amount of $62.2 million.The 13 properties have 181,559 square feet of built space and 98,062 square feet of additional air rights for a total buildable of 279,701 square feet according to PincusCo analysis of city data. The loan price per built square foot is $492 and the price per buildable square foot is $319 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 signatory for PH Realty Capital was Peter Hungerford. The signatory for Rialto Capital Management was Liat Heller. Peter Hungerford is the founder of PH Realty Capital.

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 448-452 West 57th Street.

Prior sales and revenue

The owners according to the Department of Housing Preservation and Development includes Peter Hungerford, head officer and Luis Guardado, site manager. The business entity is 448-452 West 57 Associates Llc. Out of the 13 properties, 12 with a total of 181,559 square feet of built space generated revenue of $5.9 million per year.

The property

The 448-452 West 57th Street parcel has frontage of 100 feet and is 100 feet deep with a total lot size of 10,042 square feet. The zoning is R8 which allows for up to 6.02 times floor area ratio (FAR) for residential. The city-designated market value for the property in 2022 is $5.8 million.The most recent loan totaled $62.2 million and was provided by Bethpage Federal Credit Union on October 28, 2021.

Violations and lawsuits

The properties were involved in one lawsuit and zero bankruptcies over the past two years. The suit was a $10 million money judgment filed on July 30, 2021, by Arthur Haruvi against Abraham Haruvi. In addition, according to city public data, the properties have received two DOB violations, $48,810 in ECB penalties, 98 housing violations, $59,000 in OATH penalties, and one housing litigation 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 Hell’s Kitchen, the bulk, or 39 percent of the 45 million square feet of commercial built space are residential elevator buildings, with specialty buildings next occupying 17 percent of the space. In sales, Hell’s Kitchen has 3.5 times the average sales volume among other neighborhoods with $972.1 million in sales volume in the last two years and is the 13th highest in Manhattan. For development, Hell’s Kitchen has 1.3 times the average amount of major developments relative to other neighborhoods and is the 18th highest in Manhattan. It had 1.2 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. There was one pre-foreclosure suit filed among other residential walkup buildings in the past 12 months.

The block

On the tax block of 448-452 West 57th Street, PincusCo has identified the owners of nine of the 25 commercial properties representing 604,043 square feet of the 894,827 square feet. The largest owner is Yellowstone Real Estate Investments, followed by Arthur Haruvi and then Scharfman Organization. There are no active new building construction projects on this tax block.

The majority, or 43 percent of the 1 million square feet of built space are hotel buildings, with residential elevator buildings next occupying 35 percent of the space.

Surrounding

Within a 400-foot radius of 448-452 West 57th Street, Pincusco identified seven commercial real estate items of interests occurred over the past 24 months.
Of those seven items, three were sales above $5 million totaling $216.7 million. The most recent of the three was Yellowstone Real Estate Investments which bought the 441,347-square-foot, four-unit hotel (H2) on 440 West 57th Street for $154.9 million from Woodridge Capital Partners on April 7, 2021.
Of those seven items, four were loans above $5 million totaling $117.9 million. The most recent of the four was Joseph Punia which borrowed $13.5 million from First Republic Bank secured by the 207,080-square-foot, 276-unit rental (D3) on 435 West 57th Street on April 6, 2022.

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