Browning School pays $18.3M to Chapman Group for industrial in Lenox Hill

Browning School through the entity The Browning School signed a 99-year lease as tenant valued at $18.3 million with the Chapman Group as landlord through the entity 337 Garage LLC for the industrial building (G1) at 337 East 64th Street in Lenox Hill, Manhattan.
The deal closed on September 9, 2022 and was recorded on October 12, 2022. The property has 46,210 square feet of built space according to PincusCo analysis of city data. The lease price per built square foot is $396 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 Chapman Group was Patrick Milner. The signatory for the Browning School was John Botti. The Chapman Group is a family-owned firm in the parking garage business. The ground lease is for a total of 99 years composed of an initial term of 33 years and several extensions. The school has a right of first offer to purchase the property.

Prior sales and revenue

Prior to this transaction, PincusCo has no record that the buyer Browning School had purchased any other properties and has no record it sold any properties over the past 24 months.
The seller Chapman Group had not purchased any other properties and had not sold any properties over the same time period. The 46,210-square-foot property generated revenue of $2.3 million or $49 per square foot, according to the most recent income and expense figures.

The property

The 337 East 64th Street parcel has frontage of 100 feet and is 100 feet deep with a total lot size of 10,042 square feet. The zoning is R8B which allows for up to 4 times floor area ratio (FAR) for residential. 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 since September of 2020. In addition, according to city public data, the property has not received any significant violations in the last year.

Development

On the lot, there is one active major alteration construction project for a 47,170 square-foot E building. The project was developed by Patrick Milner with plans filed May 2, 2022 and it has not been permitted yet.

The neighborhood

In Lenox Hill, the bulk, or 35 percent of the 51.9 million square feet of commercial built space are elevator buildings, with specialty buildings next occupying 28 percent of the space. In sales, Lenox Hill has the highest sale turnover among other neighborhoods in the city with $3.3 billion in sales volume in the last two years. For development, Lenox Hill has 1.6 times the average amount of major developments relative to other neighborhoods and is the 16th highest in Manhattan. It had 1.6 million 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 three of the 27 commercial properties representing 270,640 square feet of the 676,945 square feet. The largest owner is Stonehenge NYC, followed by Parkoff Organization and then Nathan Chelmis.
On the tax block, there was one new building construction project filed totaling 47,040 square feet. It is a N/A-unit, 47,040-square-foot B building developed by Edward Mahoney with plans filed July 9, 2013 and permitted January 26, 2015.

The majority, or 71 percent of the 669,118 square feet of built space are elevator buildings, with walkup buildings next occupying 12 percent of the space.

The seller

The PincusCo database currently indicates that Chapman Group owned at least two commercial properties in New York City with 34,470 square feet and a city-determined market value of $14 million. (Market value is typically about 50% of actual value.) Within the portfolio, all identified are office properties. They are all located in Manhattan.

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