Adams & Company pays $5.8M to Rockrose for 13% stake in office in Flatiron District

Adams & Company through the entity 121 East 24th Street LLC paid $5.8 million to Rockrose Development through the entity T24p LLC for the office building (O6) at 121 East 24th Street in Flatiron District, Manhattan. This is the second partial interest transfer between the parties in a month. On July 20, 2023, Adams & Company paid $28 million to Rockrose for a 12.9 percent stake in 44 West 18th Street.
The new deal closed on August 1, 2023 and was recorded on August 3, 2023. The property has 58,744 square feet of built space according to a PincusCo analysis of city data.
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 a 13% tenant in common interest.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer Adams & Company purchased four properties in four transactions for a total of $55.4 million and sold one property in one transactions 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 one properties in one transactions for a total of $28.1 million over the same time period. The 58,744-square-foot property generated revenue of $3.6 million or $61 per square foot, according to the most recent income and expense figures.

The property

The office building in Flatiron District has 58,744 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 50 feet and is 98 feet deep with a total lot size of 4,938 square feet. The zoning is C6-2A which allows for up to 6 times floor area ratio (FAR) for commercial and up to 6.02 times FAR for residential with inclusionary housing. The city-designated market value for the property in 2022 is $15.3 million.

Violations and lawsuits

The property was involved in one lawsuit and zero bankruptcies over the past two years. The suit was a $24.2 million judgment concerning a partition filed on March 17, 2022, by Rockrose Development against None. In addition, according to city public data, the property has received one DOB violation and $1,000 in OATH penalties in the last year.

Development

There are no active new building construction projects or major alteration projects with initial costs more than $1 million on this tax lot.

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 $1.4 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 14th 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 seven of the 12 commercial properties representing 1,131,457 square feet of the 1,221,989 square feet. The largest owner is Robert Getreu, followed by Mcsam Hotel Group and then Hong, Michael.
On the tax block, there was one new building construction project filed totaling 39,171 square feet. It is a 129-unit, 39,171 square-foot hotel/dormitory/shelter (R-1) building submitted by McSam Hotel Group and filed by Sam Chang with plans filed February 25, 2015 and permitted January 7, 2016.

The majority, or 64 percent of the 1.2 million square feet of built space are specialty buildings, with office buildings next occupying 29 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 $66 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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