Stellar Management signs $47M construction loan for 197-unit development in Concourse

Stellar Management through the entity SB Gerard Avenue, LLC as borrower signed a new construction loan with lender Customers Bank valued at $47 million for the 197-unit project at 580 Gerard Avenue in Concourse, Bronx.
On the lot, there is one active new building construction project for a 197-unit, 147,087 square-foot R-2 building. The project was submitted by Sharone Karten with plans filed September 15, 2021 and permitted October 21, 2022.
The deal closed on September 28, 2023 and was recorded on October 10, 2023. The prior lender was Stellar Management which held debt that had an original loan amount of $17 million.
The property has 30,345 square feet of built space and 124,796 square feet of additional air rights for a total buildable of 124,796 square feet according to a PincusCo analysis of city data. The loan price per buildable square foot is $376 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 September 2, 2020, for $16.9 million. The signatory for Stellar Management was Adam Roman. The signatory for Customers Bank was Daniel Miller.

Prior sales and revenue

The 30,345-square-foot property generated revenue of $591,121 or $19 per square foot, according to the most recent income and expense figures.

The property

The development building in Concourse has 30,345 square feet of built space and 124,796 square feet of additional air rights for a total buildable of 124,796 square feet according to a PincusCo analysis of city data. The parcel has frontage of 358 feet and is 89 feet deep with a total lot size of 31,199 square feet. The lot is irregular. The zoning is R7A which allows for up to 4 times floor area ratio (FAR) for residential with inclusionary housing. The city-designated market value for the property in 2022 is $2.7 million. The most recent loan totaled $17 million and was provided by Stellar Management on September 6, 2022.

Violations and lawsuits

The property was involved in three lawsuits and zero bankruptcies over the past two years. The highest value suit was a $12.9 million judgment concerning a partnership filed on October 25, 2021, by Karten Organization and Sharone Karten against Joshua Schuster and Silverback Development. In addition, according to city public data, the property has received 12 DOB violations, $1.3 million in ECB penalties, and $15,125 in OATH penalties in the last year.

The neighborhood

In Concourse, The bulk, or 46 percent of the 13.4 million square feet of commercial built space are elevator buildings, with industrial buildings next occupying 16 percent of the space. In sales, Concourse has had very little sales volume relative to other neighborhoods with $178.9 million in sales volume in the last two years. For development, Concourse has had very little major development activity relative to other neighborhoods.It had 578,355 square feet of commercial and multi-family construction under development in the last two years, which represents 4 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of two of the seven commercial properties representing 76,743 square feet of the 128,819 square feet. The two identified owners are Karten Organization and DHS.
On the tax block, there was one new building construction project filed totaling 147,087 square feet. It is a 197-unit, 147,087 square-foot residential (R-2) building submitted by Sharone Karten with plans filed September 15, 2021 and permitted October 21, 2022.

The majority, or 61 percent of the 128,819 square feet of built space are office buildings, with hotel buildings next occupying 20 percent of the space.

The borrower

The PincusCo database currently indicates that Stellar Management owned at least 82 commercial properties with 7,618 residential units in New York City with 10,260,414 square feet and a city-determined market value of $1.4 billion. (Market value is typically about 50% of actual value.) The portfolio has $2.2 billion in debt, with top three lenders as Goldman Sachs, New York Community Bank, and Helaba respectively. Within the portfolio, the bulk, or 77 percent of the 10,260,414 square feet of built space are elevator properties, with office properties next occupying 8 percent of the space. The bulk, or 80 percent of the built space, is in Manhattan, with Bronx next at 11 percent of the space.

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