Sovereign Partners signs $71.2M loan with Deutsche Pfandbriefbank for Tower56 purchase
Sovereign Partners through the entity T56 Owners, LLC as borrower signed a acquisition loan with lender Deutsche Pfandbriefbank valued at $71.2 million for the office building (O4) at 126 East 56th Street in Midtown East, Manhattan. Sovereign Partners bought the property for $113 million at the same time.
The deal closed on April 4, 2023 and was recorded on May 2, 2023. The prior lender was Blackstone Group which held debt that had an original loan amount of $100 million.
The property has 171,591 square feet of built space according to a PincusCo analysis of city data. The loan price per built square foot is $414 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 Sovereign Partners was Cyrus Sakhai. The signatory for Deutsche Pfandbriefbank was Ralf Dresch and Christian Sand.
Prior sales and revenue
The 171,591-square-foot property generated revenue of $14.4 million or $84 per square foot, according to the most recent income and expense figures.
The property
The office building in Midtown East has 171,591 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 60 feet and is 100 feet deep with a total lot size of 6,025 square feet. The zoning is C5-2 which allows for up to 10 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 $76.1 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 $935 in OATH penalties 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 17.6 million square feet of commercial and multi-family construction under development in the last two years, which represents 28 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 11 of the 25 commercial properties representing 949,483 square feet of the 1,446,501 square feet. The largest owner is Time Equities, followed by Solil Management and then Sol Goldman Investments.
On the tax block, there were three new building construction projects totaling 624,252 square feet. The largest is a 511,538 square-foot business (B) building submitted by L&L Holding Company and filed by William Potts with plans filed September 18, 2013 and permitted August 18, 2014. The second largest is a 62-unit, 59,819 square-foot residential (R-2) building submitted by Zeckendorf Development and filed by Arthur Zeckendorf Iii with plans filed August 12, 2019 and permitted January 28, 2020.
The majority, or 82 percent of the 1.4 million square feet of built space are office buildings, with hotel buildings next occupying 6 percent of the space.
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