REEC signs $70M refi with Parkview Financial for dev site in East Village

Real Estate Equities Corporation through the entity REEC St Marks Lessee Lp as borrower signed a refi loan with lender Parkview Financial through the entity Parkview Financial REIT, Lp valued at $70 million for the development site at 23 Third Avenue in East Village, Manhattan, also known as 1` St Marks Place in East Village, Manhattan. REEC plans a 45,000 square foot office building at the site.
The deal closed on June 3, 2022 and was recorded on June 23, 2022. The prior lender was Madison Realty Capital which held debt that had an original loan amount of $48 million. The three parcels have zero square feet of built space.
The signatory for Real Estate Equities Corporation was Mark Seigel. The signatory for Parkview Financial was Ted Jung. This is an additional $22 million in debt added to the $58 million provided in 2019.

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 23 Third Avenue.

The property

The 23 Third Avenue parcel has frontage of 30 feet and is 74 feet deep with a total lot size of 2,200 square feet. The zoning is C6-1 which allows for up to 6 times floor area ratio (FAR) for commercial and up to 3.44 times FAR for residential. The city-designated market value for the property in 2022 is $3.3 million.

Violations and lawsuits

The properties were involved in one lawsuit and zero bankruptcies over the past two years. The suit was a $48 million commercial foreclosure concerning a loan filed on August 12, 2021, by Madison Realty Capital against Real Estate Equities Corp., Brandon Miller, and Mark Seigel. In addition, according to city public data, the properties have received one DOB violation, $12,500 in ECB penalties, and $19,620 in OATH penalties in the last year.

Development

On these lots, there is one active new building construction project for a zero-unit, 29,089-square-foot B building. The project was developed by Mark Seigel with plans filed October 12, 2018 and it has not been permitted yet.

The neighborhood

In East Village, the bulk, or 35 percent of the 19.3 million square feet of commercial built space are residential walkup buildings, with residential elevator buildings next occupying 27 percent of the space. In sales, East Village has 2.1 times the average sales volume among other neighborhoods with $593.6 million in sales volume in the last two years and is the 21st highest in Manhattan. For development, East Village has had very little major development activity relative to other neighborhoods.It had 152,634 square feet of commercial and multi-family construction under development in the last two years, which represents 0.79 percent of the neighborhood’s built space. There were three pre-foreclosure suit filed among other development buildings in the past 12 months.

The block

On the tax block of 23 Third Avenue, PincusCo has identified the owners of nine of the 37 commercial properties representing 69,478 square feet of the 286,793 square feet. The largest owner is Derby Copeland Capital, followed by UBS Realty Investors and then Real Estate Equities Corporation. There is one active new building construction project totaling 29,089 square feet. It is a 29,089-square-foot B building developed by Mark Seigel with plans filed October 12, 2018 and it has not been permitted yet.

The majority, or 55 percent of the 275,910 square feet of built space are residential walkup buildings, with mixed-use buildings next occupying 16 percent of the space.

The borrower

The PincusCo database currently indicates that Real Estate Equities Corporation owned at least nine commercial properties. They are all located in Manhattan.

Surrounding

Within a 400-foot radius of 23 Third Avenue, PincusCo identified five commercial real estate items of interests occurred over the past 24 months.
Of those five items, two were sales above $5 million totaling $18 million. The most recent of the two was Derby Copeland Capital which bought the 4,914-square-foot, three-unit mixed-use building (S2) on 218 East 9th Street for $5.1 million from Lisa Lerner on November 1, 2021.
Of those five items, three were loans above $5 million totaling $82.6 million. The most recent of the three was Timothy D. O’Reilly which borrowed $7.3 million from Barclays secured by the 8,160-square-foot, 11-unit rental (C1) on 27 East 7th Street on February 10, 2022.

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