USAA Real Estate, Madison Realty sign $128M loan with PCCP for 299-unit Midtown rental

USAA Real Estate and Madison Realty Capital signed a $128 million loan with lender PCCP for the 299-unit residential elevator building at 160 East 48th Street in Midtown East, Manhattan, public records show.

The deal closed on January 10, 2022 and was recorded on January 24, 2022.

The partners bought the property, called The Buchanan, in 2016 for $270 million. No acquisition loan followed the purchase and this is the first loan since. The loan agreement says this loan is “not intended to constitute a ‘building loan mortgage’.

Edmund Donaldson, managing director of portfolio management for USAA Real Estate signed for the owner entity 160 East 48th Street Owner II, LLC.  Steve Towle signed for PCCP through the entity Pacificcal Debt V, LLC.

The property has 297,703 square feet of built space according to PincusCo analysis of city data. The loan price per built square foot is $429 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 297,703-square-foot property generated revenue of $14.1 million or $48 per square foot, according to the most recent income and expense figures.

USAA and Madison Realty Capital did not immediately respond to a PincusCo request for comment.

The DOB issued a major alteration (A1) initial temporary certificate of occupancy for the building with 289 residential units on October 25, 2013.

In Midtown East, the majority, or 77 percent of the 65.7 million square feet of built space are office buildings, with residential elevator buildings next occupying 8 percent of the space. In sales, Midtown East has 4 times the average sales volume among other neighborhoods with $1.1 billion in sales volume in the last two years and is the 10th highest in Manhattan.

For development, Midtown East has 4 times the average amount of major developments relative to other neighborhoods and is the 4th highest in Manhattan. It had 3.6 million square feet of commercial and multi-family construction under development in the last two years, which represents 6 percent of the neighborhood’s built space.

On the tax block, the majority, or 64 percent of the 887,831 square feet of built space are hotel buildings, with residential elevator buildings next occupying 34 percent of the space. The owners according to the Department of Housing Preservation and Development include Pete McLaughlin, executive managing director for USAA Real Estate as head officer and Ardit Hysaj, as agent. The business entities are Dermot Realty Management Company and 160 East 48th Street Owner II, Llc.

Within a 400-foot radius of 160 East 48th Street, PincusCo identified 15 commercial real estate items of interests occurred over the past 24 months. Of those 15 items, one was in new building development. It was a new building permit issued on August 12, 2021 for a 151,836-square-foot R-2 building with 137 residential units at 135 East 47th Street. Of those 15 items, three were for major renovation including a certificate of occupancy change. They was one permit applications with a total initial cost of $336,272 and two permits with a total initial cost of $15.7 million. The most recent of these three items was the permit on September 18, 2020 for a 490,000-square-foot B building with N/A residential units at 780 Third Avenue.

Of those 15 items, three were sales above $5 million totaling $338.3 million. The most recent of the three was C-III Capital Partners which bought the 314,568-square-foot, one-unit hotel (H1) on 509 Lexington Avenue for $173.5 million from DiamondRock Hospitality Company on July 9, 2021. Of those 15 items, eight were loans above $5 million totaling $425.4 million. The most recent of the eight was William Kaufman Organization which borrowed $71 million from Bank of America secured by the 286,212-square-foot, 40-unit office building (O4) on 767 3rd Avenue on January 14, 2022.

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