Prime Group signs $31.5M refi for industrial properties in Highbridge

Prime Group Holdings through the entity Prime Storage Bronx MLK Boulevard, LLC as borrower signed a refi loan with lender Societe Generale through the entity Societe Generale Financial Corporation valued at $31.5 million for five industrial properties including the industrial building (F2) at 950 University Avenue in Highbridge, Bronx.

The deal closed on January 8, 2024 and was recorded on January 16, 2024. The prior lender was Benefit Street Partners which held debt that had an original loan amount of $29.9 million.

The five properties have 141,170 square feet of built space and 148,723 square feet of additional air rights for a total buildable of 290,093 square feet according to a PincusCo analysis of city data. The loan price per built square foot is $223 and the price per buildable square foot is $108 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 Prime Group Holdings was Robert J. Moser. The signatory for Societe Generale was Justin Cappuccino.

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 950 University Avenue.

The property

The industrial buildings in Highbridge have 141,170 square feet of built space and 148,723 square feet of additional air rights for a total buildable of 290,093 square feet according to a PincusCo analysis of city data. The parcel has frontage of 452 feet and is 175 feet deep with a total lot size of 42,200 square feet. The lot is irregular. The zoning is M1-5 which allows for up to 5 times floor area ratio (FAR) for manufacturing. The city-designated market value for the property in 2022 is $11.9 million. The most recent loan totaled $29.9 million and was provided by Benefit Street Partners on September 3, 2020.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the properties for the past 24 months. In addition, according to city public data, the properties have received seven DOB violations and $600 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 $1 million on this tax lot.

The neighborhood

In Highbridge, The majority, or 60 percent of the 12.5 million square feet of commercial built space are elevator buildings, with walkup buildings next occupying 26 percent of the space. In sales, Highbridge has the 23rd highest sale turnover among other neighborhoods in Bronx with $54.5 million in sales volume in the last two years. For development, Highbridge has near average amount of major developments among other neighborhoods and is the 5th highest in Bronx. It had 979,471 square feet of commercial and multi-family construction under development in the last two years, which represents 8 percent of the neighborhood’s built space.

The block

On the tax block of 950 University Avenue, PincusCo has identified the owners of 16 of the 32 commercial properties representing 254,013 square feet of the 423,052 square feet. The largest owner is Prime Storage, followed by Prime Group Holdings and then PGS.
On the tax block, there were two new building construction projects totaling 56,632 square feet. The largest is a 52,067 square-foot 73 building submitted by Joseph Yunatanov with plans filed June 15, 2023 and it has not been permitted yet. The second largest is a seven-unit, 4,565 square-foot residential (R-2) building submitted by Klodoaldo Durgaj with plans filed February 24, 2022 and permitted August 30, 2022.

The majority, or 40 percent of the 423,052 square feet of built space are walkup buildings, with industrial buildings next occupying 33 percent of the space.

The borrower

The PincusCo database currently indicates that Prime Group Holdings owned at least 11 commercial properties in New York City with 601,613 square feet and a city-determined market value of $84.5 million. (Market value is typically about 50% of actual value.) The portfolio has $198.5 million in debt, borrowed from Slate Asset Management and Citibank. Within the portfolio, all identified are industrial properties. The bulk, or 47 percent of the built space, is in Queens, with Manhattan next at 24 percent of the space.

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