Arch Companies pays $5.8M to Albert Gad for 8-unit walkup in Carnegie Hill

Arch Companies through the entity 146 E 89 Borrower 1 LLC paid $5.8 million to Albert Gad through the entity New Century Gardens, LLC for the eight-unit residential walkup building (C1) at 146 East 89th Street in Carnegie Hill, Manhattan.
The deal closed on June 28, 2022 and was recorded on July 7, 2022. The property has 5,404 square feet of built space and 13,535 square feet of additional air rights for a total buildable of 18,945 square feet according to PincusCo analysis of city data. The sale price per built square foot is $1,064 and the price per buildable square foot is $303 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 seller bought the property on January 13, 2017, for $5.1 million. The signatory for Albert Gad was Jamie A. Forman. The signatory for Arch Companies was Jared Chassen. Jared Chassen is a partner of Arch Companies. 

Prior sales and revenue

Prior to this transaction, Pincusco has records that the buyer Arch Companies purchased five properties in three transactions for a total of $90.1 million and sold one property in one transaction for a total of $31.1 million over the past 24 months.
The seller Albert Gad had not purchased any other properties and had not sold any properties over the same time period. The former owners according to the Department of Housing Preservation and Development includes Albert Gad, head officer and Michael Villani, site manager. The business entity is New Century Gardens Llc.

The property

The 146 East 89th Street parcel has frontage of 20 feet and is 100 feet deep with a total lot size of 2,105 square feet. The zoning is C1-8X which allows for up to 2 times floor area ratio (FAR) for commercial and up to 9 times FAR for residential with inclusionary housing. The city-designated market value for the property in 2022 is $4.8 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 $100 in OATH penalties in the last year.

The neighborhood

In Carnegie Hill, the majority, or 80 percent of the 36.6 million square feet of commercial built space are residential elevator buildings, with specialty buildings next occupying 9 percent of the space. In sales, Carnegie Hill has 3.3 times the average sales volume among other neighborhoods with $1.1 billion in sales volume in the last two years and is the 13th highest in Manhattan. For development, Carnegie Hill has near average amount of major developments among other neighborhoods and is the 23rd highest in Manhattan. It had 933,852 square feet of commercial and multi-family construction under development in the last two years, which represents 3 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of 11 of the 29 commercial properties representing 366,055 square feet of the 550,399 square feet. The largest owner is Rudin Management, followed by Ditmas Management Corp. and then Solil Management. There are no active new building construction projects on this tax block.

The majority, or 65 percent of the 817,901 square feet of built space are residential elevator buildings, with residential walkup buildings next occupying 15 percent of the space.

The buyer

The PincusCo database currently indicates that Arch Companies owned at least nine commercial properties with 97,743 square feet and a city-determined market value of $32 million. (Market value is typically about 50% of actual value.) The portfolio has $130.6 million in debt, with top three lenders as Madison Realty Capital, CIM Group, and First Republic Bank respectively. Within the portfolio, the bulk, or 72 percent of the 97,743 square feet of built space are office properties, with walkup properties next occupying 18 percent of the space. The bulk, or 78 percent of the built space, is in Manhattan, with Brooklyn next at 12 percent of the space.

Surrounding

Within a 400-foot radius of 146 East 89th Street, PincusCo identified 10 commercial real estate items of interests occurred over the past 24 months.
Of those 10 items, one was for major renovation including a certificate of occupancy change. It was an initial temporary certificate of occupancy issued on November 24, 2020 for the $844,000 renovation of the R-3 building with one residential unit at 156 East 89th Street.
Of those 10 items, two were sales above $5 million totaling $26.2 million. The most recent of the two was Peak Capital Advisors which bought the 9,855-square-foot, 14-unit rental (C4) on 161 East 89th Street and one other property for $11.6 million from Ip Wing Kong and Yuet Tong Kong on April 20, 2022.
Of those 10 items, seven were loans above $5 million totaling $654 million. The most recent of the seven was Chetrit Group and Stellar Management which borrowed $539.5 million from Bank of Montreal secured by the 690,703-square-foot, 154-unit rental (D6) on 16O East 88th Street and one other property on May 27, 2022.

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