Cofinance Group sells office building in East Village for $18.9M

The entity 137 Second Avenue Holdings, LLC registered with the law firm Tarter Krinsky & Drogin paid $18.9 million to Cofinance Group through the entity 137 Second Avenue Owner, LLC for the office building (O2) at 137 2nd Avenue in East Village, Manhattan. PincusCo could not identify the beneficial owner behind the buyer LLC.
The deal closed on July 25, 2023 and was recorded on July 31, 2023. The property has 17,066 square feet of built space and 6,877 square feet of additional air rights for a total buildable of 23,920 square feet according to a PincusCo analysis of city data. The sale price per built square foot is $1,110 and the price per buildable square foot is $792 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 May 30, 2019, for $18 million. The contract date was May 8, 2023. The buyer entity in the Department of State is registered with Tarter Krinsky & Drogin but in Acris it is listed in care of the brokerage firm Denham Wolf Real Estate Services

Prior sales and revenue

The seller Cofinance Group purchased two properties in two transactions for a total of $11.8 million and had not sold any properties over the past 24 months. The 17,066-square-foot property generated revenue of $1.4 million or $82 per square foot, according to the most recent income and expense figures.

The property

The office building in East Village has 17,066 square feet of built space and 6,877 square feet of additional air rights for a total buildable of 23,920 square feet according to a PincusCo analysis of city data. The parcel has frontage of 49 feet and is 120 feet deep with a total lot size of 5,980 square feet. The zoning is R7A which allows for up to 4 times floor area ratio (FAR) for residential with inclusionary housing. The property is in the Individual Landmark. The city-designated market value for the property in 2022 is $7.6 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 not received any significant violations in the last year.

Development

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 East Village, The bulk, or 44 percent of the 15.5 million square feet of commercial built space are walkup buildings, with elevator buildings next occupying 20 percent of the space. In sales, East Village has 1.8 times the average sales volume among other neighborhoods with $638.5 million in sales volume in the last two years and is the 21st highest in Manhattan. For development, East Village has had very little major development activity relative to other neighborhoods.It had 356,552 square feet of commercial and multi-family construction under development in the last two years, which represents 2 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of 10 of the 30 commercial properties representing 82,853 square feet of the 270,844 square feet. The largest owner is Ubs Realty Investors, followed by Real Estate Equities Corporation and then Madison Realty Capital.
On the tax block, there was one new building construction project filed totaling 29,089 square feet. It is a 29,089 square-foot business (B) building submitted by Mark Seigel with plans filed October 12, 2018 and permitted April 27, 2023.

The majority, or 56 percent of the 270,844 square feet of built space are walkup buildings, with mixed-use buildings next occupying 16 percent of the space.

The seller

The PincusCo database currently indicates that Cofinance Group owned at least three commercial properties with 14 residential units in New York City with 15,950 square feet and a city-determined market value of $14.3 million. (Market value is typically about 50% of actual value.) The portfolio has $13.6 million in debt, borrowed from Metropolitan Commercial Bank. Within the portfolio, all identified are mixed-use properties. The bulk, or 70 percent of the built space, is in Brooklyn, with Manhattan next at 30 percent of the space.

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