RXR signs $101.5M construction loan with Bank OZK for 255K sf storage in Red Hook

RXR Realty through the entity Rxr-Lba Red Hook Court Street Owner LLC as borrower signed a new construction loan with lender Bank OZK valued at $101.5 million for three properties including the industrial building (F8) at 730 Court Street in Red Hook, Brooklyn, industrial building (G1) at 722 Court Street in Red Hook, Brooklyn.
RXR filed plans with the address 683 Court Street for a 255,370 square foot warehouse building.
The deal closed on September 30, 2022 and was recorded on October 13, 2022. The prior lender was Bank OZK which held debt that had an original loan amount of $73.8 million.The three properties have 17,357 square feet of built space and 277,773 square feet of additional air rights for a total buildable of 294,500 square feet according to PincusCo analysis of city data. The loan price buildable square foot is $344 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 RXR Realty was Jason Barnett. The signatory for Bank OZK was Juan Gonzalez.

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 730 Court Street.

Prior sales and revenue

Out of the three properties, one with a total of 17,357 square feet of built space generated revenue of $106,050 per year.

The property

The 730 Court Street parcel has frontage of 470 feet and is 260 feet deep with a total lot size of 138,950 square feet. The lot is irregular. The zoning is M3-1 which allows for up to 2 times floor area ratio (FAR) for manufacturing The city-designated market value for the property in 2022 is $2.9 million.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the properties since September of 2020. In addition, according to city public data, the properties have not received any significant violations in the last year.

Development

On these lots, there is one active new building construction project for a 255,370 square-foot S-1 building. The project was developed by Todd Rechler with plans filed April 21, 2022 and it has not been permitted yet.

The neighborhood

In Red Hook, the bulk, or 49 percent of the 9 million square feet of commercial built space are industrial buildings, with elevator buildings next occupying 28 percent of the space. In sales, Red Hook has 2.3 times the average sales volume among other neighborhoods with $806.1 million in sales volume in the last two years and is the 4th highest in Brooklyn. For development, Red Hook has near average amount of major developments among other neighborhoods and is the 19th highest in Brooklyn. It had 956,446 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. There were two pre-foreclosure suit filed among other industrial buildings in the past 12 months.

The block

On the tax block of 730 Court Street, PincusCo has identified the owners of two of the two commercial properties representing 10,357 square feet of the 10,357 square feet. The identified owner is RXR Realty.
On the tax block, there was one new building construction project filed totaling 255,370 square feet. It is a 255,370-square-foot storage (S-1) building developed by Todd Rechler with plans filed April 21, 2022 and it has not been permitted yet.

The borrower

The PincusCo database currently indicates that RXR Realty owned at least 27 commercial properties in New York City with 10,771,326 square feet and a city-determined market value of $3.7 billion. (Market value is typically about 50% of actual value.) Within the portfolio, the bulk, or 92 percent of the 10,771,326 square feet of built space are office properties, with elevator properties next occupying 4 percent of the space. The bulk, or 87 percent of the built space, is in Manhattan, with Brooklyn next at 12 percent of the space.

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