Anonymous buyer pays $21M to Extell, Bluestone, Princeton RE for bankrupt mixed-use in SoHo

Glass Stone Properties through the entity Glass Stone Properties LLC paid $21 million to Extell Development, Bluestone Group, and Princeton Real Estate Partners through the entity 175 Spring Street LLC for the mixed-use building (K2) at 173 Spring Street in SoHo, Manhattan. The property was part of a large portfolio investor, lumber company owner and strip club operator Robert Gans had before losing it in bankruptcy, 22-10888-mg.

In a related transaction, PincusCo exclusively report that developer Cheskel Schwimmer had signed a $33.2 million contract with Extell Development, Bluestone Group, and Princeton Real Estate Partners to buy another piece of the former Gans portfolio, 616 11th Avenue.
The deal closed on February 16, 2024 and was recorded on March 15, 2024. The property has 13,816 square feet of built space and 5,120 square feet of additional air rights for a total buildable of 18,940 square feet according to a PincusCo analysis of city data. The sale price per built square foot is $1,519 and the price per buildable square foot is $1,108 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 Extell Development, Bluestone Group, and Princeton Real Estate Partners was attorney William Henrich. The contract date was January 17, 2024.

The buyer is anonymous, but appears to be a high-net worth individual, based on the purchase contract, and that there was no debt. Also one of the attorneys for the buyer is a Chicago-based partner with the law firm McDermott Will & Emery, Jonathan Motto who, according to his webpage, “focuses his practice on counseling families, family offices, business owners, executives and individuals.”
The brokerage firms were Colliers and Compass, according to the purchase agreement.

Prior sales and revenue

Prior to this transaction, PincusCo has no record that the buyer Glass Stone Properties had purchased any other properties and has no record it sold any properties over the past 24 months.
The seller Extell Development purchased 16 properties in five transactions for a total of $1.2 billion and sold 18 properties in 16 transactions for a total of $540.4 million over the same time period.

The property

The mixed-use building in SoHo has 13,816 square feet of built space and 5,120 square feet of additional air rights for a total buildable of 18,940 square feet according to a PincusCo analysis of city data. The parcel has frontage of 46 feet and is 100 feet deep with a total lot size of 5,506 square feet. The lot is irregular. The zoning is R7-2 which allows for up to 3.44 times floor area ratio (FAR) for residential. The property is in the Sullivan-Thompson Historic District. The city-designated market value for the property in 2022 is $3.2 million. The most recent loan totaled 0.0 and was provided by Centennial Bank on April 15, 2022.

Violations and lawsuits

The property was involved in two lawsuits and two bankruptcies over the past two years. The highest value suit was a $100 million money judgment concerning a loan filed on April 14, 2022, by ROBERT M. GANS, RICHARD GANS, and CAREN GANS against Bluestone Group. The highest value bankruptcy was filed on September 14, 2022, by Robert Gans citing assets of $200 million. In addition, according to city public data, the property has received $600 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 SoHo, The bulk, or 46 percent of the 9.5 million square feet of commercial built space are office buildings, with mixed-use buildings next occupying 14 percent of the space. In sales, SoHo has 1.9 times the average sales volume among other neighborhoods with $557.2 million in sales volume in the last two years and is the 16th highest in Manhattan. For development, SoHo has had very little major development activity relative to other neighborhoods.It had 187,604 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 six of the 15 commercial properties representing 110,979 square feet of the 194,712 square feet. The largest owner is William Alvin Korn, followed by United American Land and then Kenneth Rosenblum.
There are no active new building construction projects on this tax block.

The majority, or 52 percent of the 194,712 square feet of built space are walkup buildings, with mixed-use buildings next occupying 33 percent of the space.

The seller

The PincusCo database currently indicates that Extell Development owned at least 67 commercial properties with 773 residential units in New York City with 2,830,410 square feet and a city-determined market value of $750.4 million. (Market value is typically about 50% of actual value.) The portfolio has $5.9 billion in debt, with top three lenders as Guggenheim Partners, Blackstone Group, and Prudential Credit Opportunities respectively. Within the portfolio, the bulk, or 38 percent of the 2,830,410 square feet of built space are specialty properties, with elevator properties next occupying 28 percent of the space. The bulk, or 96 percent of the built space, is in Manhattan, with Brooklyn next at 4 percent of the space.
The PincusCo database currently indicates that Bluestone Group owned at least 16 commercial properties with 53 residential units in New York City with 238,360 square feet and a city-determined market value of $63 million. (Market value is typically about 50% of actual value.) The portfolio has $67.9 million in debt, borrowed from Signature Bank and TriState Capital Bank. Within the portfolio, the bulk, or 30 percent of the 238,360 square feet of built space are mixed-use properties, with industrial properties next occupying 23 percent of the space. The bulk, or 59 percent of the built space, is in Manhattan, with Bronx next at 21 percent of the space.
The PincusCo database currently indicates that Princeton Real Estate Partners owned at least one commercial property in New York City with 24,710 square feet and a city-determined market value of $2.7 million. (Market value is typically about 50% of actual value.) The portfolio consists of at least a single industrial property. It is located in Brooklyn.

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