RCH Capital buys $3.6M note secured by Garment District building

RCH Capital through the entity Rch/Kcp 2021 Fund LLC bought a note with an original principal of $3.6 million from Webster Bank secured by Pillar Property Management’s specialty building (W4) at 312 West 36th Street in Garment District, Manhattan. The property is occupied by the arts organization The Tank.
The deal closed on March 15, 2024 and was recorded on April 1, 2024. The prior lender was Webster Bank which held debt that had an original loan amount of $3.6 million.

The property has 26,124 square feet of built space and 28,186 square feet of additional air rights for a total buildable of 54,310 square feet according to a PincusCo analysis of city data.  (The total square feet assumes no air rights have been sold.)
The signatory for Pillar Property Management was Kiumarz Geula. Robin Wagher is the loan servicer for RCH Capital, which is led by the Razook family. The $3.6 million loan was provided in 2012.

The property

The specialty building in Garment District has 26,124 square feet of built space and 28,186 square feet of additional air rights for a total buildable of 54,310 square feet according to a PincusCo analysis of city data. The parcel has frontage of 55 feet and is 98 feet deep with a total lot size of 5,431 square feet. The city-designated market value for the property in 2022 is $5.1 million.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the property for the past 24 months. In addition, according to city public data, the property has received $3,350 in OATH penalties in the last year.

Development

For the tax lot building, it received its initial rehab certificate of occupancy on September 25, 2013. 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 Garment District, The majority, or 69 percent of the 51.8 million square feet of commercial built space are office buildings, with hotel buildings next occupying 12 percent of the space. In sales, Garment District has 1.7 times the average sales volume among other neighborhoods with $472.1 million in sales volume in the last two years and is the 19th highest in Manhattan. For development, Garment District is the 5th most active neighborhood among other neighborhoods. It had 7.5 million square feet of commercial and multi-family construction under development in the last two years, which represents 15 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of 11 of the 20 commercial properties representing 835,724 square feet of the 1,440,736 square feet. The largest owner is Weihong Hu, followed by Viking Management and then Raber Enterprises.
On the tax block, there were two new building construction projects totaling 118,485 square feet. The largest is a 166-unit, 59,250 square-foot hotel/dormitory/shelter (R-1) building submitted by Wei Hong Hu and filed by Wei Hong Hu with plans filed May 14, 2019 and permitted May 1, 2023. The second largest is a 151-unit, 59,235 square-foot hotel/dormitory/shelter (R-1) building submitted by Weihong Hu with plans filed August 20, 2016 and it has not been permitted yet.

The majority, or 46 percent of the 1.4 million square feet of built space are office buildings, with hotel buildings next occupying 37 percent of the space.

The borrower

The PincusCo database currently indicates that Pillar Property Management owned at least six commercial properties in New York City with 178,190 square feet and a city-determined market value of $26.7 million. (Market value is typically about 50% of actual value.) The portfolio has $98.2 million in debt, with top three lenders as Dime Community Bank, Bank of Hope, and Bank of America respectively. Within the portfolio, the bulk, or 43 percent of the 178,190 square feet of built space are office properties, with specialty properties next occupying 30 percent of the space. The bulk, or 59 percent of the built space, is in Queens, with Bronx next at 41 percent of the space.

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