Vanbarton Group signs $211.2M construction loan with Brookfield for resi conversion in FiDi

Vanbarton Group through the entity EO 160 Water LLC as borrower signed a rehab construction loan with lender Brookfield Asset Management through the entity Bref VI Trs LLC valued at $211.2 million for the conversion of the office building (O4) at 160 Water Street in Financial District, Manhattan. to a residential building.
The deal closed on August 30, 2022 and was recorded on September 8, 2022. The prior lender was AIG which held debt that had an original loan amount of $70 million. The property has 481,858 square feet of built space according to PincusCo analysis of city data. The loan price per built square foot is $438 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 April 30, 2014, for $165 million. The signatory for Vanbarton Group was Justin B. Kleinman. The signatory for Brookfield Asset Management was James Sharkey. The Commercial Observer reported that the loan brokers were Gideon Gil, Adam Spies, Kempton Coady and Alex Lapidus of Cushman & Wakefield.

Prior sales and revenue

The 481,858-square-foot property generated revenue of $20.6 million or $43 per square foot, according to the most recent income and expense figures.

The property

The 160 Water Street parcel has frontage of 112 feet and is 232 feet deep with a total lot size of 24,092 square feet. The lot is irregular. The zoning is C5-5 which allows for up to 15 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 $64.6 million.The most recent loan totaled $70 million and was provided by Brookfield Properties on April 30, 2021.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the property since September of 2020. In addition, according to city public data, the property has received three DOB violations, $5,625 in ECB penalties, and $6,955 in OATH penalties in the last year.

Development

On these lots, there is one active major alteration construction project for a 592-unit, 531,682-square-foot R-2 building. The project was developed by Joey Chilelli with plans filed November 16, 2021 and it has not been permitted yet.

The neighborhood

In Financial District, the majority, or 75 percent of the 81.3 million square feet of commercial built space are office buildings, with elevator buildings next occupying 15 percent of the space. In sales, Financial District has the 9th highest sale turnover among other neighborhoods in the city with $1.6 billion in sales volume in the last two years. For development, Financial District is the 5th most active neighborhood among other neighborhoods. It had 7.8 million square feet of commercial and multi-family construction under development in the last two years, which represents 10 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of two of the 47 commercial properties representing 969,808 square feet of the 1,221,526 square feet. The two identified owners are Metro Loft Management and Vanbarton Group.
There is one active new building construction project totaling 21,120 square feet. It is a 48-unit, 21,120-square-foot R-1 building developed by George Drallios with plans filed December 7, 2018 and it has not been permitted yet.

The majority, or 50 percent of the 971,258 square feet of built space are elevator buildings, with office buildings next occupying 50 percent of the space.

The borrower

The PincusCo database currently indicates that Vanbarton Group owned at least 51 commercial properties in New York City with 2,900,518 square feet and a city-determined market value of $978.3 million. (Market value is typically about 50% of actual value.) The portfolio has $1.2 billion in debt, with top three lenders as Blackstone Group, Blackstone Mortgage Trust, and Canadian Imperial Bank of Commerce respectively. Within the portfolio, the bulk, or 77 percent of the 2,900,518 square feet of built space are office properties, with elevator properties next occupying 13 percent of the space. They are all located in Manhattan.

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