Chelsfield signs 99-year lease valued at $50.3M for SoHo office, retail

The London-based investment firm Chelsfield as tenant through the entity 580 Broadway LLC signed a 99-year lease valued at $50.3 million with landlord Richard Feldman through the entity Broad-Prince Realty Corp. for the midblock office building at 580 Broadway in SoHo, Manhattan.

At the same time, Chelsfield signed a $35 million rehab construction loan with BridgeInvest.
The deal closed on March 18, 2022 and was recorded on March 24, 2022.The property has 127,597 square feet of built space according to PincusCo analysis of city data. The sale price per built square foot is $394 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 Richard Feldman was Pankaj Mistry. The signatory for Chelsfield was Ryan Fuld. This 99-year lease was originally signed in 2021. The firm is an asset management company based in London with self-reported assets under management of $5.4 billion. The firm announced the acquisition in a press release but did not disclose the lease value.

Prior sales and revenue

Prior to this transaction, Pincusco has no record that the buyer Chelsfield had purchased any other properties and has no record it sold any properties over the past 24 months.
The seller Richard Feldman had not purchased any other properties and had not sold any properties over the same time period. The 127,597-square-foot property generated revenue of $6.8 million or $53 per square foot, according to the most recent income and expense figures.

The property

The 580 Broadway parcel has frontage of 51 feet and is 200 feet deep with a total lot size of 9,475 square feet. The lot is irregular. The zoning is M1-5B which allows for up to 5 times floor area ratio (FAR) for manufacturing The property is in the SoHo-Cast Iron Historic District. The city-designated market value for the property in 2022 is $34.4 million.

Violations and lawsuits

The property was not involved in any lawsuits or bankruptcies in the past years. In addition, according to city public data, the property has received one DOB violation and $6,050 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 SoHo, the bulk, or 33 percent of the 13 million square feet of commercial built space are office buildings, with residential elevator buildings next occupying 26 percent of the space. In sales, SoHo has 2.3 times the average sales volume among other neighborhoods with $637.7 million in sales volume in the last two years and is the 19th highest in Manhattan. For development, SoHo has had very little major development activity relative to other neighborhoods.It had 137,726 square feet of commercial and multi-family construction under development in the last two years, which represents 1 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of three of the seven commercial properties representing 354,160 square feet of the 1,063,967 square feet. The largest owner is ACHS Management, followed by Olmstead Properties and then Madison Capital. There are no active new building construction projects on this tax block.

The majority, or 91 percent of the 1.1 million square feet of built space are office buildings, with retail buildings next occupying 9 percent of the space.

Surrounding

Within a 400-foot radius of 580 Broadway, PincusCo identified 11 commercial real estate items of interests occurred over the past 24 months.
Of those 11 items, five were sales above $5 million totaling $110.7 million. The most recent of the five was Galice285 LLC which bought one condo unit in the 5,180-square-foot, 34-unit mixed-use building (RM) on 285 Lafayette Street for $16.4 million from Zulex Trust on September 28, 2021.
Of those 11 items, six were loans above $5 million totaling $311.6 million. The most recent of the six was Warren Freyer which borrowed $17.6 million from Morgan Stanley secured by the 24,011-square-foot, 11-unit mixed-use building (K4) on 57 Prince Street on May 20, 2021.

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