Related Companies signs $300M refi for Gateway Center mall in East New York

Related Companies through the entity Gateway Center Properties Phase II Owner, LLC (and others) as borrower signed a refi loan with lender Bank of America valued at $300 million for 11 tax parcels that make up Gateway Center Brooklyn mall, including the retail (K6) at 410 Gateway Drive, the retail (K1) at 360 Gateway Drive and the retail (K1) at 590 Gateway Drive, all in East New York, Brooklyn.
The deal closed on October 22, 2024 and was recorded on October 28, 2024. The prior lender was Comm 2014-CCRE20 with servicer Wells Fargo which held debt that had an original loan amount of $300 million.
The 11 properties have 607,483 square feet of built space and 3,678,497 square feet of additional air rights for a total buildable of 4,285,876 square feet according to a PincusCo analysis of city data. The loan price per built square foot is $493 and the price per buildable square foot is $69 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 A. Goldstein. The signatory for Bank of America was Steven Wasser. This is a refinance of a loan from August 2014 of $300 million that was packaged into a securitized trust, Comm 2014-CCRE20 with master servicer Wells Fargo. Glenn A. Goldstein is president of Related Retail, a division of Related Companies.

The property

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.

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 $4,220 in OATH penalties in the last year.

Development

For the tax lot buildings, 11 out of the 11 buildings received a initial certificate of occupancy in the last ten years. 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 44.6 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 1.2 times the average sales volume among other neighborhoods with $293.2 million in sales volume in the last two years and is the 23rd highest in Brooklyn. For development, East New York is the 10th most active neighborhood among other neighborhoods. It had 4.9 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 410 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 Related Companies, followed by Rockpoint Group and then Brooksville Company.
On the tax block, there were 26 new building construction projects totaling 182,265 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 175 commercial properties with 9,569 residential units in New York City with 21,192,766 square feet and a city-determined market value of $6 billion. (Market value is typically about 50% of actual value.) The portfolio has $5.9 billion in debt, with top three lenders as Wells Fargo, Carlyle Group, and Pacific Life Insurance Company respectively. Within the portfolio, the bulk, or 45 percent of the 21,192,766 square feet of built space are elevator properties, with office properties next occupying 31 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.

Direct link to Acris document. link