Amerant Bank acquires two retail condos at Essex Crossing from developers, $24.4M value

Amerant Bank acquired from the joint venture Delancey Street Associates two retail condominiums with a transaction price of $24.4 million that make up a portion of the store space at the base of the building 242 Broome Street, the western-most tower in the nine-building, nearly 2-million-square foot Essex Crossing in the Lower East Side of Manhattan. 242 Broome Street is a residential and commercial condominium building.

Delancey Street Associates is a joint venture which includes developers Taconic Partners, Goldman Sachs, BFC Partners, L+M Development Partners and Prusik Group.

One of the retail units covers space on the first floor, and another covers the lower level space, which is occupied by Gutter, a bowling alley.
Taconic is a co-developer on the massive project and in 2019 took out a $36 million loan from Amerant Bank secured by these two retail condo units and the former location of the International Center of Photography, at 250 Bowery.  The 250 Bowery space was removed from the loan. There are five retail condo units in 242 Broome Street.

Taconic and Amerant did not respond to requests for comment.

The International Center of Photography was briefly open at 250 Bowery, then relocated to 79 Essex Street, which is part of the block.

The transfers occurred in two transactions. The condo units are the ground floor 10,543-square-foot tax lot 1502, “retail unit 1” and the lower level 17,781-square-foot 1505, “retail unit 4.”

In the first, Amerant Bank through the entity MCNA Properties IV, LLC acquired from Delancey Street Associates through the entity Site 1 Retail Unit 4 Owner LLC for the retail condo valued at $15.3 million.
The deal closed on March 31, 2023 and was recorded on April 10, 2023. The property has 17,781 square feet of built space according to a PincusCo analysis of city data. The sale price per built square foot is $862 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.)

In the second, Amerant Bank through the entity MCNA Properties IV, LLC acquired from Delancey Street Associates through the entity Site 1 Retail Unit 1 Owner LLC, the retail condo valued at $9.1 million.

The deal closed on March 31, 2023 and was recorded on April 10, 2023. The property has 10,543 square feet of built space according to a PincusCo analysis of city data. The sale price per built square foot is $862 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 signatory for Delancey Street Associates was Taconic Partners’ Andrew Zlotnick. The signatory for Amerant Bank was Carlos Iafigliola.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer Amerant Bank purchased one property in one transaction for a total of $12.7 million and sold one property in one transaction for a total of $6.5 million over the past 24 months.
The seller Taconic Partners purchased three properties in two transactions for a total of $92.2 million and sold two properties in two transactions for a total of $16.9 million over the same time period.

The property

The retail condo in Lower East Side has 17,781 square feet of built space according to a PincusCo analysis of city data. The parcel has a total lot size of 17,781 square feet. The property has a 421A exemption that started in 2020 and expires in 2040. The city-designated market value for the property in 2022 is $15.1 million.

Development

For the tax lot building, it received its initial certificate of occupancy on July 1, 2020. There are no active new building construction projects or major alteration projects with initial costs more than $1 million on this tax lot. On the tax lot, the most recent condominium plan was filed by SITE 1 DSA OWNER LLC to create 55 residential units in a building at 242 Broome Street in Lower East Side, Manhattan, called 242 Broome Street Condominium that has a $37.5 million sellout, according to an December 8, 2015 submission to the New York State Attorney General. The principals of the sponsor, SITE 1 DSA OWNER LLC, were Brandon Baron, Charles Bendit, Donald Capoccia, Joseph Ferrara, Sanford Loewentheil, Ronald Moelis, and Paul Pariser.

The neighborhood

In Lower East Side, The majority, or 51 percent of the 23.8 million square feet of commercial built space are elevator buildings, with walkup buildings next occupying 21 percent of the space. In sales, Lower East Side has 1.5 times the average sales volume among other neighborhoods with $507 million in sales volume in the last two years and is the 26th highest in Manhattan. For development, Lower East Side has near average amount of major developments among other neighborhoods and is the 24th highest in Manhattan. It had 1.1 million square feet of commercial and multi-family construction under development in the last two years, which represents 5 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of six of the 19 commercial properties representing 59,031 square feet of the 240,350 square feet. The largest owner is Xiao Ling Huang, followed by Softstone Development and then Harvey Moscot.
On the tax block, there were two new building construction projects totaling 171,121 square feet. The largest is a 55-unit, 139,135 square-foot residential (R-2) building submitted by Taconic Partners and filed by Peter Febo with plans filed September 11, 2014 and permitted March 15, 2016. The second largest is a 41-unit, 31,986 square-foot residential (R-2) building submitted by Sharon Huang with plans filed March 23, 2020.

The seller

The PincusCo database currently indicates that Taconic Partners owned at least 32 commercial properties with 1,673 residential units in New York City with 2,178,267 square feet and a city-determined market value of None. (Market value is typically about 50% of actual value.) The portfolio has $1.3 billion in debt, with top three lenders as Apollo Global Management, Jackson National Life Insurance Company, and Upper Manhattan Empowerment respectively. Within the portfolio, the bulk, or 53 percent of the 2,178,267 square feet of built space are walkup properties, with office properties next occupying 25 percent of the space. The bulk, or 68 percent of the built space, is in Bronx, with Manhattan next at 32 percent of the space.

Correction: A prior version of this post identified only Taconic Partners as the borrower. The story was updated to identify the borrower as Delancey Street Associates and include Taconic Partners as one of the developers within the joint venture.

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