Solil Management signs $18M refi for office in Midtown East, debt down by $12M

Solil Management through the entity 598 Madison LLC as borrower signed a refi loan with lender State Farm Realty Mortgage through the entity State Farm Realty Mortgage, L.L.C. valued at $18 million for the office building (O6) at 598 Madison Avenue in Midtown East, Manhattan.
The deal closed on May 24, 2023 and was recorded on June 6, 2023. The prior lender was Flagstar Bank which held debt that had an original loan amount of $29.9 million, representing a decline of nearly $12 million.
The property has 76,656 square feet of built space according to a PincusCo analysis of city data. The loan price per built square foot is $234 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 Solil Management was Jane H. Goldman. The signatory for State Farm Realty Mortgage was Matthe D. Melick and Christiane M. Stoffer.

Prior sales and revenue

The 76,656-square-foot property generated revenue of $11.9 million or $155 per square foot, according to the most recent income and expense figures.

The property

The office building in Midtown East has 76,656 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 100 feet and is 49 feet deep with a total lot size of 4,920 square feet. The zoning is C5-3 which allows for up to 15 times floor area ratio (FAR) for commercial and up to 10 times FAR for residential with inclusionary housing. The city-designated market value for the property in 2022 is $67.5 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 not received any significant violations 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 Midtown East, The majority, or 81 percent of the 62.6 million square feet of commercial built space are office buildings, with hotel buildings next occupying 7 percent of the space. In sales, Midtown East has the 2nd highest sale turnover among other neighborhoods in the city with $3.9 billion in sales volume in the last two years. For development, Midtown East is the most active neighborhood among other neighborhoods. It had 17.2 million square feet of commercial and multi-family construction under development in the last two years, which represents 27 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 seven of the 19 commercial properties representing 970,594 square feet of the 1,921,836 square feet. The largest owner is Zohar Ben-Dov, followed by Vornado Realty Trust and then Richard Gordon.
On the tax block, there was one new building construction project filed totaling 27,853 square feet. It is a 27,853 square-foot mercantile (M) building submitted by Lori Buchbinder with plans filed April 16, 2014 and it has not been permitted yet.

The majority, or 65 percent of the 1.9 million square feet of built space are office buildings, with retail buildings next occupying 28 percent of the space.

The borrower

The PincusCo database currently indicates that Solil Management owned at least 260 commercial properties with 4,326 residential units in New York City with 8,978,810 square feet and a city-determined market value of $2.5 billion. (Market value is typically about 50% of actual value.) Within the portfolio, the bulk, or 36 percent of the 8,978,810 square feet of built space are elevator properties, with office properties next occupying 22 percent of the space. The bulk, or 70 percent of the built space, is in Manhattan, with Queens next at 15 percent of the space.

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