Copperwood seeks partition, sale of 3-building Lenox Hill dev site currently offered for $28M

Two family groups including Robert S. Lemle’s Copperwood Real Estate, are at loggerheads over whether they should sell three walkup properties at 1382 to 1386 Second Avenue in Lenox Hill valued at $28 million as a development site or operate them as an ongoing enterprise. The two sides are at a standstill because each owns a 50-percent stake in the properties, that have a total of 18 residential units and six ground floor retail units.

The business disagreement was disclosed in a lawsuit Lemle filed March 4, 2024, in New York State Supreme Court seeking the sale of the assets located at the corner of Second Avenue and East 71st Street in Manhattan. The dispute highlights the challenges owners face trying to determine how to maximize the value of real estate in a market with low lending and sales volumes.

Case 651149/2024 LINK

Ariel Property Advisors is marketing the buildings with 57,88 square feet of development rights, seeking $28 million.

The complaint does not mention any type of valuation. According to a PincusCo analysis of city records, the buildings have 57,850 square feet of development rights.

The Ariel asking price is $487 per square foot, which is above the approximate average for Manhattan development site sales in 2023 according to brokerage Development Site Advisors, which is about $400 per foot.

The group that includes Robert S. Lemle wants to sell the parcels as a development site, while the other group, including members of the Levine and Smith families, wants to re-tenant and own the assets, according to the complaint.

Court records represent the position of one party and are not necessarily accurate or complete.

According to the complaint, “In or about 2018, and continuing for a long time thereafter, the Partners agreed that the best course of action would be to operate the Property as a future development site, thereby creating the opportunity to sell the Property at a high value and end the Partnership. In 2021, in furtherance of this objective, the Partners agreed to end all residential tenancies at the Property. Consequently, there are no longer any residential tenants at the Property and the remaining commercial tenants all either have short terms left on their leases expiring this year or lease provisions permitting the Partnership to terminate the leases on six months’ notice. Because the residential units are vacant, the Partnership does not have sufficient income to meet the costs to continue owning and maintaining the Property on a long-term basis… in 2022 Y Leaf [Smith and Levine] insisted that the residential and commercial units be re-rented by the Partnership.”

The surrounding

Within a 400-foot radius of 1386 2 Avenue, PincusCo identified two commercial real estate items of interests occurred over the past 24 months. One of those two items was a sale which Salvatore Gaudio and Vilma Gaudio bought the 8,425-square-foot, 18-unit rental (C7) on 1391 2nd Avenue for $5.8 million from Salvatore Notaro on July 10, 2023. One of those two items was a loan which Chetrit Group borrowed $70.7 million from G4 Capital Partners secured by the 26,797-square-foot, 31-unit rental (D9) on 1357 2nd Avenue and three other properties on November 29, 2023.

Direct link to the property’s ACRIS page.