Bayrock Capital pays $11M to Hersha Hospitality Trust for hotel ground lease in South Ozone Park

Bayrock Capital through the entity Gates JFK Partners LLC paid $11 million to Hersha Hospitality Trust through the entity Risingsam Hospitality LLC for the ground lease control of the hotel building (H2) at 132-26 S Conduit Avenue in South Ozone Park, Queens.
The deal closed on November 2, 2022 and was recorded on November 14, 2022. The property has 69,700 square feet of built space according to PincusCo analysis of city data. The sale price per built square foot is $157 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 Hersha Hospitality Trust was Ashish R. Parikh. The signatory for Bayrock Capital was Daniel Rabinowitz. This is the sale of a 99-year ground lease that started in 2003. 

Prior sales and revenue

Prior to this transaction, Pincusco has records that the buyer Bayrock Capital purchased five properties in four transactions for a total of $26.9 million and has no record it sold any properties over the past 24 months.
The seller Hersha Hospitality Trust had not purchased any other properties and sold eight properties in two transactions for a total of $333.8 million over the same time period.

The property

The 132-26 S Conduit Avenue parcel has frontage of 127 feet and is 226 feet deep with a total lot size of 27,012 square feet. The lot is irregular. The zoning is M1-2 which allows for up to 2 times floor area ratio (FAR) for manufacturing The city-designated market value for the property in 2022 is $27.3 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 one DOB violation, $2,500 in ECB penalties, and $3,250 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 $5 million on this tax lot.

The neighborhood

In South Ozone Park, the bulk, or 28 percent of the 6 million square feet of commercial built space are mixed-use buildings, with specialty buildings next occupying 27 percent of the space. In sales, South Ozone Park has the 31st highest sale turnover among other neighborhoods in Queens with $57 million in sales volume in the last two years. For development, South Ozone Park has had very little major development activity relative to other neighborhoods.It had 336,467 square feet of commercial and multi-family construction under development in the last two years, which represents 6 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of one of the three commercial properties representing 75,838 square feet of the 191,033 square feet. The identified owner is Hersha Hospitality Trust.
there are no active new building construction projects on this tax block.

all properties are hotel.

The seller

The PincusCo database currently indicates that Hersha Hospitality Trust owned at least five commercial properties in New York City with 306,794 square feet and a city-determined market value of $117.6 million. (Market value is typically about 50% of actual value.) The portfolio has $105.6 million in debt, borrowed from Citibank. Within the portfolio, all identified are hotel properties. The bulk, or 60 percent of the built space, is in Manhattan, with Queens next at 25 percent of the space.

The buyer

The PincusCo database currently indicates that Bayrock Capital owned at least eight commercial properties in New York City with 105,938 square feet and a city-determined market value of $18.6 million. (Market value is typically about 50% of actual value.) The portfolio has $51.2 million in debt, borrowed from Merchants Capital and M&T Bank. Within the portfolio, the bulk, or 57 percent of the 105,938 square feet of built space are walkup properties, with hotel properties next occupying 28 percent of the space. The bulk, or 57 percent of the built space, is in Queens, with Bronx next at 22 percent of the space.

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