Safehold signs $20.6M initial loan with John Hancock for fee under 111-unit rental in Chelsea

Safehold Inc. through the entity 500 West 23rd Street Ground Owner LLC as borrower signed an initial loan with lender John Hancock Life Insurance through the entity John Hancock Life Insurance Company (U.S.A.) valued at $20.6 million for the 111-unit residential elevator building (D8) at 500 West 23rd Street in Chelsea, Manhattan. Safehold Inc. is the fee owner, Equity Residential is the ground lessor.
The deal closed on July 24, 2024 and was recorded on August 7, 2024. The property has 109,795 square feet of built space according to a PincusCo analysis of city data. The loan price per built square foot is $187 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 Safehold Inc. was Brett Asnas. The signatory for John Hancock Life Insurance was Kimberly R. Highfield. This is related to a 2020 $93 million loan secured by a national portfolio.

Prior sales and revenue

The owners according to the Department of Housing Preservation and Development includes Jim Vonalbade, head officer and Tatiana Bond, officer. The business entity is Eqr-Chelsea, Llc. The 109,795-square-foot property generated revenue of $7.4 million or $68 per square foot, according to the most recent income and expense figures.

The property

The residential elevator building with 111 residential units in Chelsea has 109,795 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 135 feet and is 100 feet deep with a total lot size of 13,578 square feet. The zoning is C6-3A which allows for up to 6 times floor area ratio (FAR) for commercial and up to 7.52 times FAR for residential with inclusionary housing. The property has a 421A exemption that started in 2012 and expires in 2022. The city-designated market value for the property in 2022 is $45.1 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 $6,650 in OATH penalties in the last year.

Development

For the tax lot building, it received its initial certificate of occupancy on September 17, 2012. There are no active new building construction projects or major alteration projects with initial costs more than $1 million on this tax lot.

The block

On this tax block, PincusCo has identified the owners of eight of the 15 commercial properties representing 677,439 square feet of the 816,174 square feet. The largest owner is Equity Residential, followed by Meadow Partners and then Related Companies.
On the tax block, there was one new building construction project filed totaling 27,766 square feet. It is a 13-unit, 27,766 square-foot residential (R-2) building submitted by Christopher Jonns with plans filed March 8, 2017 and it has not been permitted yet.

The majority, or 66 percent of the 816,174 square feet of built space are elevator buildings, with industrial buildings next occupying 23 percent of the space.

The borrower

The PincusCo database currently indicates that Safehold Inc. owned at least one commercial property with 180 residential units in New York City with 164,559 square feet and a city-determined market value of $29.6 million. (Market value is typically about 50% of actual value.) The portfolio consists of at least a single elevator property. It is located in Brooklyn.

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