Weekly summary: $576M in sales, $1.48B in loans, low development, 11 court actions

Summary

Last week, recorded commercial sales totaled $576 million (of transactions of $500,000 and up), while commercial loans totaled $1.48 billion (of transactions $5 million and up). The commercial sales figure is slightly below the average of about $700 million per week in recorded transactions, seen over the prior quarter. The last quarter has seen about $8 billion in sales, though that figure will grow slightly as more sales are recorded.

In courts, there were three bankruptcy actions filed and two pre-foreclosures, including one on a $196 million loan. Development remained muted, with the expiration of 421a and higher lending rates impacting new projects.

Sales

PincusCo tracked 100 commercial transactions greater than $500,000 that were recorded last week, totaling $576 million. The top two were hotel transactions, including Apollo Global Management acquiring a Times Square hotel for $83.5 million from a lender who took control from a former owner, and a distressed deal valued at $73.7 million, in which lender-affiliate Barings, signed as the new owner, taking over a Garment District hotel.

The next two largest deals involved a $49.5 million nursing home sale in Corona, Queens, and $42.6 million purchase of a homeless and addiction recovery shelter in Fort Greene, Brooklyn. In that deal, the Salvation Army sold to Slate Property Group.

Other significant buyers included Angelo Gordon and Premier Equities, which paid $27 million for an Upper West Side retail condo, Hamilton Lane which bought an 87.5 percent stake in an Alphabet City apartment building valued at $24.9 million, and three office condo units sold in 936 Broadway in the Flatiron District for $12.85 million.

The number of residential units purchased in elevator buildings compared with walkups is the closest in at least five years, according to our data. So far this year, buyers have acquired about 13,208 units through rental elevator buildings, while they purchased about 11,927 units in walkup buildings (our analysis includes only buildings with four units and up). That’s a difference of just over 1,200 units. That compares with last year, when the spread was about 2,400, and far higher in previous years.

Loans

Over the last week, lenders recorded 73 loans of $5 million and up, totaling $1.48 billion, with the largest loan totaling $100 million, which Haymes Investment Company borrowed from Deutsche Bank, with the second largest a continuation of an existing loan totaling $500 million that Invesco signed with Carlyle Group for a large collection of walkup buildings that the private equity group is amassing in Brooklyn and Queens.

The other large loans included Elie Fouerti, who obtained a $74.75 million construction loan, Apollo Global Management was given a $69.5 million acquisition loan from Fortress Investment Group, CIM Group borrowed $62 million,

Courts

There were three bankruptcy actions greater than $1 million filed last week. The largest action was filed by four creditors against the entity that owns the William Vale Hotel at 55 Wythe Street in a skeletal involuntary bankruptcy petition which did not enumerate the amount alleged as due. The creditors included the Mishmeret Trust Company, the Israel-based trustee of bonds issued on the Tel Aviv Stock Exchange. Yoel Goldman and Zelig Weiss are actively battling over control of the William Vale in Brooklyn state court, in a case filed in June 2021.
The other bankruptcy actions were smaller, a $7.5 million case filed by Bao Zhi Liu over a Brooklyn property, and $1.3 million case filed by a Queens church, the Church of God of Corona Inc.
PincusCo tracked eight cases of $1 million or more filed in state courts last week. The largest was a $196 million pre-foreclosure action LoanCore Capital filed against the owner of an office and retail property in Midtown East. There was one other commercial foreclosure, for $1.5 million, with the rest being suits over investment or contracts, including a $10.4 million action at 225 Bowery over the use of a name at the hotel. In another case, at 177 Chrystie Street, the plaintiff as contract vendee seeks to terminate the $7.18 million contract based on alleged incorrect information in the contract.

Development

New building construction has fallen off dramatically, but several large buildings were still filed over the last few weeks, several with affordable housing components, but not all. The Catholic Church’s development arm filed plans for a 363-unit project in Cypress Hills where the Albanese Organization has signed a long-term lease. Meanwhile, in Flushing, FSA Capital filed plans for a 102-unit project, and in Woodside, Bentley Zhao of New Empire Corp., filed plans for a 131-unit project in Woodside, which is expected to be a condo project.

Affordable housing developers Lattire Construction and Brisa Builders also submitted plans over the past few weeks.

The total number of commercial square feet filed per month has declined sharply over the past year, with the past three months seeing only about 2 million square feet of space per month, down from more than five million per month filed between October 2021 and March 2022. The analysis included all commercial buildings including multifamily of 2,000 square feet or more, and excluded filings identified as one to three family buildings.           

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