Croman Real Estate sells 80-unit Hell’s Kitchen package for $20M, for affordable homeless housing

Brooklyn-based SMJ Development through the entity 45th Street Housing Partners LLC as the beneficial owner, in partnership with the nonprofit Services for the Underserved, paid $20 million to Croman Real Estate through the entity 351-357 West 45 LLC for four attached buildings with 80 units at 351-357 West 45th Street in Hell’s Kitchen, Manhattan.

The neighborhood news site W42st.nyc first reported that Services for the Underserved was negotiating to buy the property, and was being listed for sale by Cushman & Wakefield for $29 million. The nonprofit put out a news release today, saying 11 rent-regulated tenants in the building would remain and the other 69 units would be converted to “affordable housing for homeless families under a CityFHEPS rental assistance contract.”

Drew Popkin’s High Point Property Group, a firm active in renovating small residential buildings, is partnering on the construction, according to the release from Services for the Underserved.
The deal closed on June 26, 2024 and was recorded on June 28, 2024. The walkup building with 80 residential units in Hell’s Kitchen has 39,736 square feet of built space and 20,686 square feet of additional air rights for a total buildable of 60,452 square feet according to a PincusCo analysis of city data. The sale price per built square foot is $503 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.)
Croman Real Estate bought the property for $22 million on September 24, 2013.

The signatory for Croman Real Estate was Steven Croman. The signatory for SMJ Development was Juan Barahona. The contract date was December 21, 2023.

The transaction was structured with the nonprofit housing development fund corporation (HDFC) as the purchaser of the property, and it immediately transferring all beneficial ownership interests to SMJ Development.

The parties recorded a $19.5 million loan, however the press release from Services for the Underserved anticipated additional funding. “The team anticipates that the renovation will be funded by a $27 million subsidized construction loan from the Department of Housing Preservation and Development (HPD) and an $18 million private loan this fall.”

The property

The parcel has four buildings with frontage of 100 feet and is 100 feet deep with a total lot size of 10,042 square feet. The zoning is R8 which allows for up to 6.02 times floor area ratio (FAR) for residential. The city-designated market value for the property in 2022 is $3.6 million. The most recent loan totaled $18.5 million and was provided by Axos Bank on March 26, 2020.

Prior sales and revenue

The 39,736-square-foot property generated revenue of $985,218 or $25 per square foot, according to the most recent income and expense figures.

Violations and lawsuits

According to city public data, the property has received three DOB violations, $28,215 in ECB penalties, 55 housing violations, and $47,420 in OATH penalties in the last year.

There were no lawsuits or bankruptcies filed against the property for the past 24 months.

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 near average sales volume among other neighborhoods with $679.5 million in sales volume in the last two years and is the 11th highest in Manhattan. For development, Hell’s Kitchen is the 10th most active neighborhood among other neighborhoods. It had 5.2 million square feet of commercial and multi-family construction under development in the last two years, which represents 13 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of 18 of the 37 commercial properties representing 396,709 square feet of the 549,989 square feet. The largest owner is Bldg Management, followed by Clinton Housing Development Company and then Croman Real Estate. There are no active new building construction projects on this tax block.

The owner

The PincusCo database currently indicates that Croman Real Estate owned at least 144 commercial properties with 2,576 residential units in New York City with 1,613,557 square feet and a city-determined market value of $588.2 million. (Market value is typically about 50% of actual value.) The portfolio has $218.9 million in debt, with top three lenders as New York Community Bank, Axos Bank, and Dime Community Bank respectively. Within the portfolio, the bulk, or 80 percent of the 1,613,557 square feet of built space are walkup properties, with elevator properties next occupying 16 percent of the space. They are all located in Manhattan.

The owners according to the Department of Housing Preservation and Development includes Steven Croman, head officer and Annabelle Santiago, officer. The business entities are Centennial Properties Ny and 351-357 West 45 Llc.

The surrounding

Within a 400-foot radius of 351 West 45 Street, PincusCo identified three commercial real estate items of interests occurred over the past 24 months. One of those three items was a sale which Eric Einstein and Justin Buchanan bought the 3,988-square-foot, two-unit mixed-use building (K2) on 674 9th Avenue for $7.2 million from Premier Equities on April 3, 2023. Of those three items, two were loans above $5 million totaling $162.6 million. The most recent of the two was Namdar Realty Group, Klosed Properties, and Silber Investment Properties in which borrowed $147.1 million from Reznik Paz Nevo Trusts secured by the 9,755-square-foot, 10-unit rental (C7) on 666 9th Avenue and 19 other properties on June 5, 2024.

Direct link to the property’s ACRIS page and link to DOB NOW portal.