Vornado, Blackstone, and Hudson Pacific sign $123.2M construction loan with RBC for Pier 94 project

Vornado Realty Trust, Blackstone Group, and Hudson Pacific Properties through the entity Pier 94 Leaseco, LLC as borrower signed a new construction loan with lender RBC Real Estate Capital Partners through the entity RBC Real Estate Capital Corp. valued at $123.2 million for Pier 94 specialty building (T9) at 755 12th Avenue in Hell’s Kitchen, Manhattan.
The deal closed on August 28, 2023 and was recorded on September 12, 2023. The two properties have 105,562 square feet of built space and 818,630 square feet of additional air rights for a total buildable of 924,064 square feet according to a PincusCo analysis of city data. The loan price per built square foot is $1,167 and the price per buildable square foot is $133 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 Vornado Realty Trust, Blackstone Group, and Hudson Pacific Properties was Steven J. Borenstein.

Because multiple properties have been transacted, some of the following sections will follow the property with the largest assessed value, which in this case, is the property on 755 12th Avenue.

The property

The specialty building in Hell’s Kitchen has 105,562 square feet of built space and 818,630 square feet of additional air rights for a total buildable of 924,064 square feet according to a PincusCo analysis of city data. The parcel has frontage of 724 feet and is 266 feet deep with a total lot size of 172,841 square feet. The lot is irregular. The zoning is M2-3 which allows for up to 2 times floor area ratio (FAR) for manufacturing The city-designated market value for the property in 2022 is $66.1 million.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the properties for the past 24 months. In addition, according to city public data, the properties have not received any significant violations in the last year.

Development

On these lots, there is one active major alteration construction project for a 263,041 square-foot I building. The project was submitted by Barry Langer with plans filed June 30, 2022 and it has not been permitted yet.

The neighborhood

In Hell’s Kitchen, The bulk, or 39 percent of the 40.6 million square feet of commercial built space are elevator buildings, with specialty buildings next occupying 18 percent of the space. In sales, Hell’s Kitchen has 3.9 times the average sales volume among other neighborhoods with $1.4 billion in sales volume in the last two years and is the 10th highest in Manhattan. For development, Hell’s Kitchen is the 8th most active neighborhood among other neighborhoods. It had 4.3 million square feet of commercial and multi-family construction under development in the last two years, which represents 11 percent of the neighborhood’s built space.

The block

On the tax block of 755 12th Avenue, PincusCo has identified the owners of four of the nine commercial properties representing 105,562 square feet of the 494,762 square feet. The two identified owners are Hudson Pacific Properties and City Of New York.
On the tax block, there was one new building construction project filed totaling 4,412 square feet. It is a 4,412 square-foot mercantile (M) building submitted by Kevin Quinn with plans filed May 5, 2021 and permitted July 13, 2022.

All properties are specialty.

The borrower

The PincusCo database currently indicates that Blackstone Group owned at least 57 commercial properties with 14,156 residential units in New York City with 16,817,146 square feet and a city-determined market value of $3 billion. (Market value is typically about 50% of actual value.) The portfolio has $1.3 billion in debt, with top three lenders as Morgan Stanley, Wells Fargo, and New York Life Insurance Company respectively. Within the portfolio, the bulk, or 90 percent of the 16,817,146 square feet of built space are elevator properties, with industrial properties next occupying 6 percent of the space. The bulk, or 81 percent of the built space, is in Manhattan, with Queens next at 15 percent of the space.
The PincusCo database currently indicates that Vornado Realty Trust owned at least 55 commercial properties with four residential units in New York City with 15,165,349 square feet and a city-determined market value of $6.8 billion. (Market value is typically about 50% of actual value.) The portfolio has $5.5 billion in debt, with top three lenders as JPMorgan Chase, Goldman Sachs, and Morgan Stanley respectively. Within the portfolio, the bulk, or 78 percent of the 15,165,349 square feet of built space are office properties, with retail properties next occupying 12 percent of the space. The bulk, or 97 percent of the built space, is in Manhattan, with Bronx next at 3 percent of the space.
The PincusCo database currently indicates that Hudson Pacific Properties owned at least two commercial properties in New York City with 105,562 square feet and a city-determined market value of $103.2 million. (Market value is typically about 50% of actual value.) Within the portfolio, all identified are specialty properties. They are all located in Manhattan.

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