AlleyCorp affiliate pays $41M to Continental Equities Group for mixed-use in Nolita

An affiliate of venture capital firm AlleyCorp through the entity 174 Mott Owner LLC paid $41 million to Continental Equities Group through the entity 174 Mott Group LLC for mixed-use building (K4) at 174 Mott Street, also known as 368 Broome Street, in Nolita, Manhattan.
The deal closed on September 8, 2022 and was recorded on September 16, 2022. The property has 32,214 square feet of built space and 1,986 square feet of additional air rights for a total buildable of 34,175 square feet according to PincusCo analysis of city data. The sale price per built square foot is $1,272 and the price per buildable square foot is $1,199 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 sellers bought the building in 2006 for $8.9 million and sold a 25 percent stake on December 15, 2016, for $11 million. The signatory for Continental Equities Group was Arne Zimmerman and Jenny Haim. The signatory for AlleyCorp was Scott Schneider. Jenny Haim and Hesky Haim are principals in Continental. The buyer entity is in care of Kevin Ryan’s venture capital fund AlleyCorp. 

Prior sales and revenue

Prior to this transaction, PincusCo has no record that the buyer AlleyCorp had purchased any other properties and has no record it sold any properties over the past 24 months.
The seller Continental Equities Group had not purchased any other properties and had not sold any properties over the same time period.

The property

The 368 Broome Street parcel has frontage of 50 feet and is 109 feet deep with a total lot size of 5,677 square feet. The lot is irregular. The city-designated market value for the property in 2022 is $2.4 million.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the property since September of 2020. In addition, according to city public data, the property has received $300 in OATH penalties in the last year.

Development

Over the past five years, there have been four NYC Department of Buildings permit applications filed for this parcel valued at more than $20,000. Of those there was one major renovation application including a certificate of occupancy change (A1) filed with a total estimated value of $1.3 million.

The neighborhood

In Nolita, the bulk, or 49 percent of the 3.1 million square feet of commercial built space are walkup buildings, with elevator buildings next occupying 21 percent of the space. In sales, Nolita has the 41st highest sale turnover among other neighborhoods in Manhattan with $70.7 million in sales volume in the last two years. For development, Nolita has had very little major development activity relative to other neighborhoods.It had 76,039 square feet of commercial and multi-family construction under development in the last two years, which represents 2 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of eight of the 28 commercial properties representing 82,881 square feet of the 320,717 square feet. The largest owner is Provident Management, followed by Fu Kee Realty and then Candido P. Fernandez.
There are no active new building construction projects on this tax block.

The majority, or 66 percent of the 317,551 square feet of built space are walkup buildings, with mixed-use buildings next occupying 13 percent of the space.

The seller

The PincusCo database currently indicates that Continental Equities Group owned at least three commercial properties in New York City with 54,881 square feet and a city-determined market value of $7.2 million. (Market value is typically about 50% of actual value.) The portfolio has $18.2 million in debt, borrowed from Signature Bank. Within the portfolio, the bulk, or 63 percent of the 54,881 square feet of built space are office properties, with retail properties next occupying 27 percent of the space. They are all located in Manhattan.

Direct link to Acris document. link