PH Realty Capital signs $93.5M acquisition loan with Rialto for 13 properties in Manhattan

PH Realty Capital through the entity 1107 First Ave Owner LLC as borrower signed a acquisition loan with lender Rialto Capital Management through the entity Fs Creit Originator LLC valued at $93.5 million for 13 properties including the midblock 37-unit residential elevator building at 244 West 74th Street in Upper West Side, Manhattan, 18-unit residential elevator building at 114 East 71st Street in Lenox Hill, Manhattan, and 20-unit residential walkup building at 221 East 32nd Street in Kips Bay, Manhattan.
The deal closed on May 13, 2022 and was recorded on June 8, 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 151,718 square feet of built space and 18,885 square feet of additional air rights according to PincusCo analysis of city data. The loan price per built square foot is $616 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. This loan includes $9.39 million in construction funding.

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 244 West 74th Street.

Prior sales and revenue

The owners according to the Department of Housing Preservation and Development includes Peter Hungerford, head officer and Jose Guardado, site manager. The business entity is Simry Realty Corp. Out of the 13 properties, 11 with a total of 151,718 square feet of built space generated revenue of $5.5 million per year.

The property

The 244 West 74th Street parcel has frontage of 65 feet and is 102 feet deep with a total lot size of 6,692 square feet. The zoning is R8B which allows for up to 4 times floor area ratio (FAR) for residential. The property is in the West End-Collegiate Historic District Extension. The city-designated market value for the property in 2022 is $6.3 million.The most recent loan totaled $62.2 million and was provided by Bethpage Federal Credit Union on October 28, 2021.

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 four DOB violations, $81,250 in ECB penalties, seven housing violations, and $81,730 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 Upper West Side, the majority, or 68 percent of the 95.5 million square feet of commercial built space are residential elevator buildings, with residential walkup buildings next occupying 13 percent of the space. In sales, Upper West Side has the 8th highest sale turnover among other neighborhoods in the city with $1.5 billion in sales volume in the last two years. For development, Upper West Side has 1.9 times the average amount of major developments relative to other neighborhoods and is the 11th highest in Manhattan. It had 1.8 million 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.

The block

On the tax block of 244 West 74th Street, PincusCo has identified the owners of eight of the 16 commercial properties representing 84,424 square feet of the 289,054 square feet. The largest owner is Arthur Haruvi, followed by Brusco Group and then Finger Management. There are no active new building construction projects on this tax block.

The majority, or 69 percent of the 274,198 square feet of built space are residential elevator buildings, with residential walkup buildings next occupying 24 percent of the space.

Surrounding

Within a 400-foot radius of 244 West 74th Street, Pincusco identified eight commercial real estate items of interests occurred over the past 24 months.
Of those eight items, three were for major renovation including a certificate of occupancy change. They were one permit applications with a total initial cost of $1,000,000, one permit with a total initial cost of $632,560 and one initial temporary certificate of occupancy issuance for a project that initially costed $290,100. The most recent of these three items was the permit on February 4, 2021 for a 6,430-square-foot R-2 building with nine residential units at 268 West 73rd Street.
Of those eight items, three were sales above $5 million totaling $104.1 million. The most recent of the three was Zachary Brez which bought the 6,347-square-foot, one-unit townhouse (A4) on 260 West 73rd Street for $10.8 million from Nicholas Tsang on November 5, 2021.
Of those eight items, two were loans above $5 million totaling $15 million. The most recent of the two was GPS Realty NYC which borrowed $9.5 million from New York Community Bank secured by the 6,200-square-foot, seven-unit rental (C5) on 262 West 73rd Street and two other properties on December 16, 2021.

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