Sculptor Capital signs $116.2M construction loan with Square Mile for office in Long Island City

Sculptor Capital Management through the entity Court Square 23rd LLC as borrower signed a new construction loan with lender Square Mile Capital Management through the entity Sm Finance II LLC valued at $116.2 million for the office building (O6) at 43-10 23rd Street in Long Island City, Queens.
The deal closed on December 17, 2021 and was recorded on September 12, 2022. The prior lender was AllianceBernstein which held debt that had an original loan amount of $66.1 million. The property has 151,180 square feet of built space according to PincusCo analysis of city data. The loan price per built square foot is $768 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 owner bought the property on December 17, 2021, for $92.5 million. The signatory for Sculptor Capital Management was Steven Orbuch. The signatory for Square Mile Capital Management was Brad Cohen.

Prior sales and revenue

The 151,180-square-foot property generated revenue of $5.1 million or $34 per square foot, according to the most recent income and expense figures.

The property

The 43-10 23rd Street parcel has frontage of 220 feet and is 158 feet deep with a total lot size of 36,650 square feet. The lot is irregular. The zoning is M1-4 which allows for up to 2 times floor area ratio (FAR) for manufacturing The city-designated market value for the property in 2022 is $15.1 million.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the property since September of 2020. In addition, according to city public data, the property has received one DOB violation, $5,000 in ECB penalties, and $9,800 in OATH penalties in the last year.

Development

On these lots, there is one active major alteration construction project for a 151,180-square-foot office (B) building. The project was developed by Jerry Adessa with plans filed May 31, 2018 and permitted December 15, 2020.

The neighborhood

In Long Island City, the bulk, or 34 percent of the 63.3 million square feet of commercial built space are elevator buildings, with industrial buildings next occupying 32 percent of the space. In sales, Long Island City has the 8th highest sale turnover among other neighborhoods in the city with $1.7 billion in sales volume in the last two years. For development, Long Island City is the 3rd most active neighborhood among other neighborhoods. It had 10.2 million square feet of commercial and multi-family construction under development in the last two years, which represents 16 percent of the neighborhood’s built space. There was one pre-foreclosure suit filed among other office buildings in the past 12 months.

The block

On this tax block, PincusCo has identified the owners of one of the two commercial properties representing 151,180 square feet of the 331,180 square feet. The identified owner is Longfellow Real Estate Partners.
There are no active new building construction projects on this tax block.

All properties are office.

The borrower

The PincusCo database currently indicates that Sculptor Capital Management owned at least four commercial properties in New York City with 194,374 square feet and a city-determined market value of $29 million. (Market value is typically about 50% of actual value.) Within the portfolio, the bulk, or 78 percent of the 194,374 square feet of built space are office properties, with hotel properties next occupying 22 percent of the space. The bulk, or 78 percent of the built space, is in Queens, with Manhattan next at 22 percent of the space.

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