Dalan Management pays $7.5M for mixed-use in East Village, down from $10.9M in 2015

Dalan Management through the entity 730 N Mariposa Owner LLC paid $7.5 million to South Carolina investors in care of Mill Management through the entity 1881 Second Avenue LLC for the four-unit mixed-use building (S9) at 82 Second Avenue in East Village, Manhattan.
The deal closed on July 19, 2022 and was recorded on August 1, 2022. The property has 4,956 square feet of built space and 4,632 square feet of additional air rights for a total buildable of 9,600 square feet according to PincusCo analysis of city data. The sale price per built square foot is $1,513 and the price per buildable square foot is $781 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 November 17, 2015, for $10.9 million. The signatory for Mill Management was Steven J. Schacter. The signatory for Dalan Management was Andrew B. Wrublin. Mill Management is the asset manager, not the beneficial owner. According to reports from 2015, a South Carolina investor bought the building from Icon Realty Management in 2015 for $10.9 million, with the asset in care of Steven Shacter’s Mill Management of Greenwich. The property was managed by an affiliate of Jonis Realty, called Citi Urban Management. That same South Carolina investor also bought 326-328 East 4th Street for $20 million, but those properties have not sold, according to a review of Acris.

Prior sales and revenue

Prior to this transaction, Pincusco has no record that the buyer Dalan Management had purchased any other properties and sold one properties in one transactions for a total of $5.2 million over the past 24 months. Affiliates of Dalan, SKW Funding, has acquired a number of notes.
The seller Mill Management had not purchased any other properties and had not sold any properties over the same time period. The former owners according to the Department of Housing Preservation and Development includes Josh Halegua, head officer and Sylvio Grima, site manager. The business entities are Citi-Urban Management and Fawn Second Avenue Llc. The 4,956-square-foot property generated revenue of $250,674 or $51 per square foot, according to the most recent income and expense figures.

The property

The 82 Second Avenue parcel has frontage of 24 feet and is 100 feet deep with a total lot size of 2,400 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 East Village / Lower East Side Historic District. The city-designated market value for the property in 2022 is $3.5 million.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the property since September of 2020. In addition, according to city public data, the property has received $2,275 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 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 1.9 times the average sales volume among other neighborhoods with $641.3 million in sales volume in the last two years and is the 23rd highest in Manhattan. For development, East Village has had very little major development activity relative to other neighborhoods.It had 273,204 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 seven of the 22 commercial properties representing 87,529 square feet of the 261,335 square feet. The largest owner is Brett Haber, followed by SHEL Capital and then Bluestone Investments. There is one active new building construction project totaling 25,911 square feet. It is a 27-unit, 25,911-square-foot R-2 building developed by Stefano Farsura with plans filed October 11, 2012 and permitted August 29, 2016.

The majority, or 51 percent of the 250,367 square feet of built space are walkup buildings, with elevator buildings next occupying 17 percent of the space.

The buyer

The PincusCo database currently indicates that Dalan Management owned at least 14 commercial properties in New York City with 976,640 square feet and a city-determined market value of $223.8 million. (Market value is typically about 50% of actual value.) The portfolio has $91.3 million in debt, with top three lenders as Popular Bank, Mesa West Capital, and Ladder Capital respectively. Within the portfolio, the bulk, or 75 percent of the 976,640 square feet of built space are elevator properties, with walkup properties next occupying 16 percent of the space. The bulk, or 61 percent of the built space, is in Brooklyn, with Manhattan next at 39 percent of the space.

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