Breaking Ground pays $172.1M to CenterSquare, Principal for dorm in Carnegie Hill, was $212.5M in 2019

UPDATED 8:30 a.m., July 3, 2024: Affordable housing developer Breaking Ground through the entity 1760 Third Avenue Housing Development Fund Corp paid $172.1 million to CenterSquare Investment Management, Principal Real Estate Investors, and 60 Guilders through the entity 1760 Third Ave Property Owner, LLC for the dorm building (H8) at 1760 Third Avenue in Carnegie Hill, Manhattan.
The deal closed on June 26, 2024 and was recorded on July 1, 2024. The property has 247,615 square feet of built space according to a PincusCo analysis of city data. The sale price per built square foot is $695 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 sale included air rights, according to a person familiar with the transaction, resulting that the sale for the building alone was $155 million and the approximately $17 million difference between that and the recorded price of $172.1 million was air rights.
CenterSquare, then called RCG Longview, and 60 Guilders bought the building on February 19, 2019, for $212.5 million from the Chetrit Group.

The signatories for the sellers were Dean Ravosa, John Carrick and Troy A. Koerselman. The signatory for Breaking Ground was David Beer. The contract date was January 5, 2023. Crain’s reported on the sale, noting the buyer plans to create 435 units of affordable housing.

In September 2023, 60 Guilders submitted a major alteration plan to convert the building from a dorm to a 434-unit, 247,615 square-foot residential (R-2) building.

A Newmark team including Adam Spies, Adam Doneger and Michael Collins brokered the sale.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer Breaking Ground purchased two properties in one transaction for a total of $6 million and has no record it sold any properties over the past 24 months.
The seller CenterSquare Investment Management had not purchased any other properties and sold one property in one transaction for a total of $180 million over the same time period.

The property

The hotel building in Carnegie Hill has 247,615 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 201 feet and is 100 feet deep with a total lot size of 20,183 square feet. The zoning is R10 which allows for up to 10 times floor area ratio (FAR) for residential with inclusionary housing. The city-designated market value for the property in 2022 is $91.2 million. The most recent loan totaled 0.0 and was provided by Waterfall Asset Management on December 20, 2021.

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 $9,420 in OATH penalties in the last year.

The neighborhood

In Carnegie Hill, The majority, or 56 percent of the 13.5 million square feet of commercial built space are elevator buildings, with walkup buildings next occupying 18 percent of the space. In sales, Carnegie Hill has 2.8 times the average sales volume among other neighborhoods with $748.1 million in sales volume in the last two years and is the 10th highest in Manhattan. For development, Carnegie Hill has 1.2 times the average amount of major developments relative to other neighborhoods and is the 25th highest in Manhattan. It had 1.3 million square feet of commercial and multi-family construction under development in the last two years, which represents 9 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of 20 of the 28 commercial properties representing 431,199 square feet of the 786,546 square feet. The largest owner is Willy Wiener, followed by William Guerrero and then Steve Srsen.
On the tax block, there was one new building construction project filed totaling 109,960 square feet. It is a 109,960 square-foot educational (E) building submitted by Concepcion Alvar with plans filed September 4, 2015 and permitted February 12, 2020.

The majority, or 40 percent of the 786,546 square feet of built space are elevator buildings, with specialty buildings next occupying 31 percent of the space.

The seller

The PincusCo database currently indicates that 60 Guilders owned at least five commercial properties with 300 residential units in New York City with 561,443 square feet and a city-determined market value of $162.5 million. (Market value is typically about 50% of actual value.) The portfolio has $121 million in debt, borrowed from Athene Annuity And Life Company and Metropolitan Commercial Bank. Within the portfolio, the bulk, or 56 percent of the 561,443 square feet of built space are elevator properties, with specialty properties next occupying 44 percent of the space. The bulk, or 62 percent of the built space, is in Manhattan, with Brooklyn next at 38 percent of the space.
The PincusCo database currently indicates that Principal Real Estate Investors owned at least three commercial properties with 168 residential units in New York City with 697,591 square feet and a city-determined market value of $170.6 million. (Market value is typically about 50% of actual value.) The portfolio has $39 million in debt, borrowed from MetLife. Within the portfolio, the bulk, or 78 percent of the 697,591 square feet of built space are office properties, with elevator properties next occupying 20 percent of the space. The bulk, or 78 percent of the built space, is in Manhattan, with Queens next at 22 percent of the space.
The PincusCo database currently indicates that Centersquare Investment Management owned at least one commercial property in New York City with 247,615 square feet and a city-determined market value of $91.2 million. (Market value is typically about 50% of actual value.) The portfolio consists of at least a single specialty property. It is located in Manhattan.

The buyer

The PincusCo database currently indicates that Breaking Ground owned at least four commercial properties with 1,013 residential units in New York City with 760,014 square feet and a city-determined market value of $81.7 million. (Market value is typically about 50% of actual value.) The portfolio has $376.6 million in debt, with top three lenders as City of New York, NYS Housing Finance Agency, and NYC Department of Housing Preservation and Development respectively. Within the portfolio, all identified are elevator properties. The bulk, or 75 percent of the built space, is in Brooklyn, with Bronx next at 16 percent of the space.

Updated: to include broker information and that the sale includes air rights.

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