118 Mulberry Street
This Chinatown mixed-use asset at 118 Mulberry Street presents notable credit concerns for a private lender. The property is 100% rent stabilized, severely constraining income growth and limiting upside potential in a market where rent stabilization has become increasingly restrictive post-HSTPA 2019. The calculator data reveals a DSCR of 0.94x — below the 1.0x threshold — and a negative cash-on-cash return of -1.27%, indicating the property does not cover its debt service at conventional leverage levels, which is a hard underwriting red flag. The $204 PPSF is at or slightly below market for Chinatown mixed-use comp sales, suggesting the price is fair but the income profile is constrained. Broker representation from Raven Property Advisors (led by Daniel Handweiler, a prolific broker with 34 deals and $327M volume) adds credibility to the transaction, but the buyer's identity is unknown, making counterparty risk assessment impossible. For Homage, this deal would require conservative LTV, strong buyer equity, and thorough rent roll review before proceeding.
Deal Stats
Parties
Seller / Landlord
Sao Fan
Sao Fan appears to be a private individual or family owner typical of Chinatown mixed-use holdings, likely a long-term owner of rent-stabilized residential and retail property in lower Manhattan with limited public transactional history.
Score Analysis
What this score means
A Grade C score indicates this deal may qualify for financing at up to 65% LTV, subject to additional due diligence. Deals at this level require more information before a term sheet can be issued.
Why this score
DSCR Below 1.0x
A DSCR of 0.94x indicates the property cannot service debt from operating income, creating fundamental underwriting risk for any lender.
100% Rent Stabilization
Post-HSTPA 2019 restrictions severely limit rent growth potential and future value appreciation on the residential component.
Negative Cash-on-Cash Return
A -1.27% return means the buyer is immediately underwater on cash flow, suggesting either overleveraging or structural property economics issues.
Fair Market Pricing at $204/SF
Price aligns with Chinatown mixed-use comps, indicating no discount to justify the income constraints.
Credible Broker Representation
Raven Property Advisors' track record ($327M volume, 34 deals) adds transaction transparency and professional oversight.
How to improve
The following actions could meaningfully improve this deal's Homage score. Each suggestion is based on the deal's profile, asset type, and current rating — addressing them before approaching a lender can increase approval likelihood and lower borrowing costs.
Reduce LTV to below 50% and increase buyer equity injection
Lower leverage would improve debt service coverage and mitigate refinance risk given negative cash flow profile.
Conduct detailed rent roll audit with lease-by-lease analysis
Verify stabilization lease terms, renewal dates, and any preferential rent situations that could improve actual income projections.
Identify buyer with strong balance sheet and long-term hold intent
Known buyer with demonstrated capital reserves and Chinatown market expertise would reduce counterparty and execution risk significantly.
