Adams & Company pays $43.6M to Rockrose for small stake in office in Flatiron District

Adams & Company through the entity 16 Madison Square West LLC paid $43.6 million to Rockrose Development through the entity Erlimba L.L.C. for a 12 percent stake in the office building (O6) at 1115 Broadway in Flatiron District, Manhattan.
The deal closed on August 14, 2023 and was recorded on August 23, 2023. The property has 259,749 square feet of built space according to a PincusCo analysis of city data.
Rockrose bought the 12 percent stake on March 16, 2020, for $26.1 million. The signatory for Rockrose Development was Edward H. Traum. The signatory for Adams & Company was David Levy. The contract date was May 15, 2023. This is another in a series of sales by Rockrose to Adams & Company of minority stakes in office buildings in area around Flatiron.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer Adams & Company purchased six properties in six transactions for a total of $77.7 million and sold one property in one transaction for a total of $148.2 million over the past 24 months.
The seller Rockrose Development purchased 10 properties in six transactions for a total of $334 million and sold three properties in three transactions for a total of $50.4 million over the same time period. The 259,749-square-foot property generated revenue of $14.8 million or $57 per square foot, according to the most recent income and expense figures.

The property

The office building in Flatiron District has 259,749 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 55 feet and is 232 feet deep with a total lot size of 22,187 square feet. The lot is irregular. The zoning is C5-2 which allows for up to 10 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 $67.5 million.

Violations and lawsuits

The property was involved in one lawsuit and zero bankruptcies over the past two years. The suit was a $806,179 None concerning a None filed on November 8, 2021, by Adams & Company against None. In addition, according to city public data, the property has received one DOB violation, $2,500 in ECB penalties, and $5,465 in OATH penalties in the last year.

Development

For the tax lot building, it received its initial certificate of occupancy on July 19, 2012. On the lot, there is one active major alteration construction project for a 280,643 square-foot B building. The project was submitted by Fred Liguori with plans filed April 11, 2013 and permitted May 28, 2014.

The neighborhood

In Flatiron District, The majority, or 71 percent of the 23.2 million square feet of commercial built space are office buildings, with elevator buildings next occupying 15 percent of the space. In sales, Flatiron District has the 10th highest sale turnover among other neighborhoods in the city with $1.5 billion in sales volume in the last two years. For development, Flatiron District has 2.5 times the average amount of major developments relative to other neighborhoods and is the 13th highest in Manhattan. It had 2.5 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 this tax block, PincusCo has identified the owners of 10 of the 20 commercial properties representing 804,635 square feet of the 1,382,183 square feet. The largest owner is Wai Yee Yung, followed by Triad Professional Services and then Tonya Webb.
On the tax block, there was one new building construction project filed totaling 25,668 square feet. It is a 68-unit, 25,668 square-foot hotel/dormitory/shelter (R-1) building submitted by Hag Lee with plans filed February 13, 2014 and it has not been permitted yet.

The majority, or 68 percent of the 1.4 million square feet of built space are office buildings, with elevator buildings next occupying 23 percent of the space.

The seller

The PincusCo database currently indicates that Rockrose Development owned at least 31 commercial properties with 5,561 residential units in New York City with 6,286,857 square feet and a city-determined market value of $1.6 billion. (Market value is typically about 50% of actual value.) The portfolio has $1.7 billion in debt, with top three lenders as Wells Fargo, MetLife, and Deutsche Pfandbriefbank respectively. Within the portfolio, the bulk, or 72 percent of the 6,286,857 square feet of built space are elevator properties, with D4 properties next occupying 14 percent of the space. The bulk, or 43 percent of the built space, is in Manhattan, with Queens next at 37 percent of the space.

The buyer

The PincusCo database currently indicates that Adams & Company owned at least six commercial properties in New York City with 1,476,669 square feet and a city-determined market value of $357.3 million. (Market value is typically about 50% of actual value.) The portfolio has $89.8 million in debt, borrowed from Apple Bank for Savings and Lincoln Life & Annuity Company of New York. Within the portfolio, all identified are office properties. They are all located in Manhattan.

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