Behrooz Hedvat pays $18M to long-time owners for office in Grand Central

UPDATED 1:05 p.m., July 1, 2024: Behrooz Hedvat through the entity 18 Dagim LLC paid $18 million to the Weatherley family through the entity Weatherley 39th Street, LLC for the office building (O6) at 16 West 39th Street in Grand Central, Manhattan.
The deal closed on June 26, 2024 and was recorded on June 28, 2024. The property has 51,273 square feet of built space according to a PincusCo analysis of city data. The sale price per built square foot is $351 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 Susan Weatherley of the Weatherley family was James W. Simpson. The signatory for Behrooz Hedvat was Behrooz Hedvat. The contract date was February 5, 2024. The Weatherley family which operated under Weatherley Realty Corporation, has owned the building since at least 1952.

James Simpson is the son of Susan Weatherley and John Swan Weatherley. John died in 2014. This building is just west of the Lord & Taylor building.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer Behrooz Hedvat purchased one property in one transaction for a total of $6.3 million and has no record it sold any properties over the past 24 months.
The seller Susan Weatherley had not purchased any other properties and had not sold any properties over the same time period.

The property

The office building in Grand Central has 51,273 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 44 feet and is 98 feet deep with a total lot size of 4,344 square feet. The zoning is M1-6 which allows for up to 10 times floor area ratio (FAR) for manufacturing. The city-designated market value for the property in 2022 is $10.6 million.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the property for the past 24 months. In addition, according to city public data, the property has received one DOB violation and $350 in OATH penalties in the last year.

Development

For the tax lot building, it received its initial certificate of occupancy on August 28, 2018. 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 Grand Central, The majority, or 83 percent of the 44.4 million square feet of commercial built space are office buildings, with hotel buildings next occupying 8 percent of the space. In sales, Grand Central has 2.4 times the average sales volume among other neighborhoods with $636.2 million in sales volume in the last two years and is the 13th highest in Manhattan. For development, Grand Central has 4.4 times the average amount of major developments relative to other neighborhoods and is the 8th highest in Manhattan. It had 4.9 million square feet of commercial and multi-family construction under development in the last two years, which represents 11 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of 14 of the 27 commercial properties representing 1,348,171 square feet of the 1,903,078 square feet. The largest owner is Weihong Hu, followed by R&B Realty Group and then Michael Besen.
On the tax block, there were two new building construction projects totaling 73,220 square feet. The largest is a 173-unit, 62,062 square-foot hotel/dormitory/shelter (R-1) building submitted by Wei Hong Hu and filed by Wei Hong Hu with plans filed April 20, 2018 and permitted July 24, 2018. The second largest is a 299-unit, 11,158 square-foot hotel/dormitory/shelter (R-1) building submitted by Alan Reich with plans filed December 30, 2016 and permitted January 4, 2019.

The majority, or 70 percent of the 1.9 million square feet of built space are office buildings, with hotel buildings next occupying 23 percent of the space.

The buyer

The PincusCo database currently indicates that Behrooz Hedvat owned at least five commercial properties with 28 residential units in New York City with 47,373 square feet and a city-determined market value of $17 million. (Market value is typically about 50% of actual value.) The portfolio has $51.4 million in debt, with top three lenders as Ladder Capital, Signature Bank, and Xyston Group respectively. Within the portfolio, the bulk, or 37 percent of the 47,373 square feet of built space are elevator properties, with walkup properties next occupying 28 percent of the space. They are all located in Manhattan.

Correction: A prior version of this post identified the building as a retail building, but in fact it’s an office building with a limited amount of retail.

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