Related Companies signs $160M refi for Gateway Center mall in East New York

Related Companies through the entity Gateway Center Properties I, L.L.C. as borrower signed a refi loan with lender Deutsche Bank through the entity DBR Investments Co. Limited valued at $160 million for the Gateway Center mall composed of 11 properties including the retail building (K8) at 339 Gateway Drive in East New York, Brooklyn, retail building (K1) at 381 Gateway Drive in East New York, Brooklyn, and retail building (K1) at 459 Gateway Drive in East New York, Brooklyn.
The deal closed on May 24, 2023 and was recorded on June 8, 2023. The prior lender was a CMBS loan packages s Series 2013-C6 which held debt that had an original loan amount of $160 million.
The 11 properties have 357,001 square feet of built space and 4,049,643 square feet of additional air rights for a total buildable of 4,406,819 square feet according to a PincusCo analysis of city data. The loan price per built square foot is $448 and the price per buildable square foot is $36 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 Related Companies was Glenn Goldstein. The signatory for Deutsche Bank was Vishal M. Mahadkar and Murray Mackinnon.

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 457 Gateway Drive.

Prior sales and revenue

Out of the 11 properties, 10 with a total of 357,001 square feet of built space generated revenue of $18.8 million per year.

The property

The industrial building in East New York has 357,001 square feet of built space and 4,049,643 square feet of additional air rights for a total buildable of 4,406,819 square feet according to a PincusCo analysis of city data. The parcel has frontage of 1,520 feet and is 522 feet deep with a total lot size of 1,479,935 square feet. The lot is irregular. The zoning is C4-2 which allows for up to 3.4 times floor area ratio (FAR) for commercial and up to 2.43 times FAR for residential. The city-designated market value for the property in 2022 is $64.6 million.

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 one DOB violation and $36,510 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 East New York, The bulk, or 40 percent of the 44.5 million square feet of commercial built space are elevator buildings, with industrial buildings next occupying 21 percent of the space. In sales, East New York has 2.4 times the average sales volume among other neighborhoods with $853.2 million in sales volume in the last two years and is the 5th highest in Brooklyn. For development, East New York is the 5th most active neighborhood among other neighborhoods. It had 4.7 million square feet of commercial and multi-family construction under development in the last two years, which represents 11 percent of the neighborhood’s built space.

The block

On the tax block of 457 Gateway Drive, PincusCo has identified the owners of 41 of the 95 commercial properties representing 8,722,579 square feet of the 9,779,939 square feet. The largest owner is Rockpoint Group, followed by Related Companies and then NYC Department Of Housing Preservation And Development.
On the tax block, there were 32 new building construction projects totaling 219,735 square feet. The largest is a eight-unit, 9,060 square-foot residential (R-2) building submitted by Rona Reodica with plans filed September 3, 2019 and permitted December 20, 2022. The second largest is a eight-unit, 9,060 square-foot residential (R-2) building submitted by Rona Reodica with plans filed September 3, 2019 and permitted December 20, 2022.

The majority, or 63 percent of the 9.8 million square feet of built space are elevator buildings, with industrial buildings next occupying 15 percent of the space.

The borrower

The PincusCo database currently indicates that Related Companies owned at least 178 commercial properties with 9,571 residential units in New York City with 21,405,438 square feet and a city-determined market value of $6 billion. (Market value is typically about 50% of actual value.) The portfolio has $4.5 billion in debt, with top three lenders as Wells Fargo, Carlyle Group, and Bank of America respectively. Within the portfolio, the bulk, or 45 percent of the 21,405,438 square feet of built space are elevator properties, with office properties next occupying 30 percent of the space. The bulk, or 61 percent of the built space, is in Manhattan, with Bronx next at 23 percent of the space.

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