Capstone, Leyad pay $57.8M to Brookfield for hotel in Hell’s Kitchen, was $82.7M in 2019

Capstone Equities and the Montreal-based Leyad through the entity CE Ink 48 De Owner LLC paid $57.8 million to Brookfield Properties through the entity Bsrep III 653 Hotel LLC for the Ink48 Hotel building (HB) at 653 11th Avenue in Hell’s Kitchen, Manhattan. The expected use is cash flowing.
The deal closed on December 12, 2024 and was recorded on December 20, 2024. The property has 153,363 square feet of built space according to a PincusCo analysis of city data. The sale price per built square foot is $376 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 September 16, 2019, for $82.7 million. The signatories for Brookfield Properties were Brookfield Asset Management executives Lisa Strauss and Amy Lancaster. The signatory for Capstone Equities and Leyad was Joshua Roshanzamir. The contract date was May 23, 2024. The Real Deal reported the sale last week.

The buyers obtained a $40 million acquisition loan from One William Street Capital Management to finance the purchase.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer Capstone Equities purchased three properties in three transactions for a total of $157.2 million and has no record it sold any properties over the past 24 months.
The seller Brookfield Properties had not purchased any other properties and sold 12 properties in nine transactions for a total of $301.2 million over the same time period. The former owners according to the Department of Housing Preservation and Development includes Olimpia Tuordan, head officer and Nick Ivezay, officer. The business entity is 653 Eleventh Avenue Llc.

The property

The hotel building in Hell’s Kitchen has 153,363 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 100 feet and is 100 feet deep with a total lot size of 10,042 square feet. The zoning is M2-4 which allows for up to 5 times floor area ratio (FAR) for manufacturing The city-designated market value for the property in 2022 is $45.2 million. The most recent loan totaled $67.5 million and was provided by United Overseas Bank on September 16, 2019.

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 $1,350 in OATH penalties in the last year.

Development

For the tax lot building, it received its initial certificate of occupancy on August 1, 2012. 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 Hell’s Kitchen, The bulk, or 39 percent of the 40.8 million square feet of commercial built space are elevator buildings, with specialty buildings next occupying 18 percent of the space. In sales, Hell’s Kitchen has 2.7 times the average sales volume among other neighborhoods with $679.6 million in sales volume in the last two years and is the 15th highest in Manhattan. For development, Hell’s Kitchen has 2.7 times the average amount of major developments relative to other neighborhoods and is the 10th highest in Manhattan. It had 3 million square feet of commercial and multi-family construction under development in the last two years, which represents 7 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of four of the eight commercial properties representing 308,279 square feet of the 416,264 square feet. The largest owner is Brookfield Properties, followed by Verizon and then Sjm Partners.
On the tax block, there were three new building construction projects totaling 204,240 square feet. The largest is a 154,140 square-foot 74 building submitted by Verizon and filed by Kevin Herb with plans filed February 9, 2023 and permitted January 23, 2024. The second largest is a 37,620 square-foot industrial (F-1) building submitted by Gary Flom with plans filed April 27, 2015 and it has not been permitted yet.

The majority, or 37 percent of the 416,264 square feet of built space are hotel buildings, with industrial buildings next occupying 36 percent of the space.

The seller

The PincusCo database currently indicates that Brookfield Properties owned at least 57 commercial properties with 4,799 residential units in New York City with 25,030,096 square feet and a city-determined market value of $5.7 billion. (Market value is typically about 50% of actual value.) The portfolio has $11.7 billion in debt, with top three lenders as Wells Fargo, JPMorgan Chase, and ING Capital respectively. Within the portfolio, the bulk, or 60 percent of the 25,030,096 square feet of built space are office properties, with elevator properties next occupying 20 percent of the space. The bulk, or 72 percent of the built space, is in Manhattan, with Brooklyn next at 21 percent of the space.

The buyer

The PincusCo database currently indicates that Capstone Equities owned at least five commercial properties in New York City with 638,695 square feet and a city-determined market value of $112.5 million. (Market value is typically about 50% of actual value.) The portfolio has $90.5 million in debt, borrowed from Argentic Investment Management and Aareal Capital. Within the portfolio, the bulk, or 60 percent of the 638,695 square feet of built space are office properties, with hotel properties next occupying 40 percent of the space. The bulk, or 60 percent of the built space, is in Brooklyn, with Manhattan next at 40 percent of the space.

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