Stellar signs $25.4M refi for 83-unit elevator rental in East Village, has refinanced $1.4B in two years

Stellar Management through the entity 14th Street Hk Realty Corp. as borrower signed a refi loan with lender New York Community Bank valued at $25.4 million for the 83-unit residential elevator building at 223 Second Avenue in the East Village, Manhattan.

The investment firm, founded by Laurence Gluck, has refinanced $1.45 billion in senior loan debt over the past two years in deals of $5 million and up. The largest loan was given by a group led by Goldman Sachs, but the most active lender was New York Community Bank, which refinanced 15 loans totaling 353 million. The next most active was by dollar was Signature Bank with three deals totaling $138 million. BankUnited and Bank Leumi each had four deals, with BankUnited lending $82 million and Bank Leumi $52.7 million.

The Second Avenue deal closed on February 25, 2022 and was recorded on April 15, 2022. The prior lender was Capital One which held debt that had an original loan amount of $28.6 million.
The property has 63,158 square feet of built space according to PincusCo analysis of city data. The loan price per built square foot is $401 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 Stellar Management was Adam Roman. The signatory for New York Community Bank was John Feijoo.

Prior sales and revenue

The owners according to the Department of Housing Preservation and Development includes Laurence Gluck, head officer and Smajlje Srdanovic, officer. The business entities are Stellar Management and 242 E. 14th Street Joint Venture.

The property

The 223 2nd Avenue parcel has frontage of 77 feet and is 139 feet deep with a total lot size of 11,455 square feet. The lot is irregular. The zoning is C1-6A which allows for up to 2 times floor area ratio (FAR) for commercial and up to 4 times FAR for residential with inclusionary housing. The city-designated market value for the property in 2022 is $17.4 million.

Violations and lawsuits

The property was not involved in any lawsuits or bankruptcies in the past years. In addition, according to city public data, the property has received six DOB violations, $8,780 in ECB penalties, and $11,830 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 $5 million on this tax lot.

The neighborhood

In the East Village, the bulk, or 35 percent of the 19.3 million square feet of commercial built space are residential walkup buildings, with residential elevator buildings next occupying 27 percent of the space. In sales, East Village has 2.1 times the average sales volume among other neighborhoods with $593.6 million in sales volume in the last two years and is the 21st highest in Manhattan. For development, East Village has had very little major development activity relative to other neighborhoods.It had 152,634 square feet of commercial and multi-family construction under development in the last two years, which represents 0.79 percent of the neighborhood’s built space. There was one pre-foreclosure suit filed among other residential elevator buildings in the past 12 months.

The block

On this tax block, PincusCo has identified the owners of five of the 28 commercial properties representing 66,841 square feet of the 362,464 square feet. The largest owner is Slavo Bernic, followed by Sak Acquisitions LLC and then Vintage Group. There are no active new building construction projects on this tax block.

The majority, or 54 percent of the 354,668 square feet of built space are residential walkup buildings, with residential elevator buildings next occupying 32 percent of the space.

The borrower

The PincusCo database currently indicates that Stellar Management owned at least 61 commercial properties with 7,837,659 square feet and a city-determined market value of $1.3 billion. (Market value is typically about 50% of actual value.) The portfolio has $1.8 billion in debt, with top three lenders as Goldman Sachs, New York Community Bank, and Signature Bank respectively. Within the portfolio, the bulk, or 76 percent of the 7,837,659 square feet of built space are residential elevator properties, with office properties next occupying 11 percent of the space. The bulk, or 79 percent of the built space, is in Manhattan, with Bronx next at 15 percent of the space.

Surrounding

Within a 400-foot radius of 223 2nd Avenue, PincusCo identified eight commercial real estate items of interests occurred over the past 24 months.
Of those eight items, eight were loans above $5 million totaling $85 million. The most recent of the eight was Sak Acquisitions LLC which borrowed $6.6 million from New York Community Bank secured by one condo unit in the 6,423-square-foot, 92-unit mixed-use building (RM) on 214 East 14th Street on November 22, 2021.

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