Vanbarton Group affiliate buys $168.4M note secured by Vanbarton’s 31 Penn Plaza

A Vanbarton Group affiliate through the entity 31 Penn Plaza Senior LLC bought a note with an original principal of $168.4 million from Morgan Stanley secured by Vanbarton Group’s office building (O6) 31 Penn Plaza at 132 West 31st Street in Penn Plaza, Manhattan.
Vanbarton Group bought the leasehold for $264.7 million in 2015 and bought the fee in January 2018 for $31 million, for a total acquisition cost of $295.7 million. Simultaneously with the fee purchase, Morgan Stanley provided the $168.4 million loan.
The note purchase deal closed on May 16, 2023 and was recorded on May 31, 2023.
The property has 384,655 square feet of built space according to a PincusCo analysis of city data.
The signatory for Vanbarton Group was Justin Kleinman. Morgan Stanley refinanced the debt on the property in January 2018 with $168,400,000.

Prior sales and revenue

The 384,655-square-foot property generated revenue of $23.7 million or $62 per square foot, according to the most recent income and expense figures.

The property

The office building in Penn Station has 384,655 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 125 feet and is 197 feet deep with a total lot size of 23,049 square feet. The lot is irregular. The zoning is M1-6 which allows for up to 10 times floor area ratio (FAR) for manufacturing The city-designated market value for the property in 2022 is $125.1 million.

Violations and lawsuits

The property was involved in one lawsuit and zero bankruptcies over the past two years. The suit was a $4.4 million money judgment concerning a retail lease filed on January 7, 2022, by Vanbarton Group against Blink Holdings. In addition, according to city public data, the property has received two DOB violations and $9,425 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 Penn Plaza, The majority, or 76 percent of the 20.4 million square feet of commercial built space are office buildings, with hotel buildings next occupying 8 percent of the space. In sales, Penn Plaza has the 40th highest sale turnover among other neighborhoods in Manhattan with $56.8 million in sales volume in the last two years. For development, Penn Plaza has 2.7 times the average amount of major developments relative to other neighborhoods and is the 12th highest in Manhattan. It had 2.8 million square feet of commercial and multi-family construction under development in the last two years, which represents 14 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of four of the 14 commercial properties representing 672,992 square feet of the 1,513,826 square feet. The largest owner is Vanbarton Group, followed by Mack Real Estate Group and then Justin Management.
On the tax block, there was one new building construction project filed totaling 465,620 square feet. It is a 375-unit, 465,620 square-foot residential (R-2) building submitted by Durst Organization and filed by Louis Esposito with plans filed April 2, 2013 and permitted March 18, 2014.

The majority, or 55 percent of the 1.5 million square feet of built space are office buildings, with hotel buildings next occupying 43 percent of the space.

The borrower

The PincusCo database currently indicates that Vanbarton Group owned at least 18 commercial properties with 465 residential units in New York City with 2,386,740 square feet and a city-determined market value of $871.4 million. (Market value is typically about 50% of actual value.) The portfolio has $1.1 billion in debt, with top three lenders as Blackstone Group, Blackstone Mortgage Trust, and Brookfield Asset Management respectively. Within the portfolio, the bulk, or 70 percent of the 2,386,740 square feet of built space are office properties, with elevator properties next occupying 17 percent of the space. The bulk, or 93 percent of the built space, is in Manhattan, with Bronx next at 7 percent of the space.

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