Data snack: Properties with large drops in value, Moinian, Kushner, Shaoul
By Adam Pincus
Overall, properties in New York City declined in so-called market value by about 5.2 percent, but thousands of buildings saw far steeper dips.
Market value is a proxy for the true potential sales value for the property. It typically is a fraction of the real sales value, and PincusCo does not intend to imply the market value is the true potential sales value for the assets.
Many declines are related to construction but some are a reflection of the market and a decline in property income. PincusCo Media reviewed thousands of records and provides here several to illustrate those with large drops. This is not a ranking and is not an exhaustive analysis.
-A commercial condominium unit in the Moinian Group’s 605 West 42nd Street fell by 55 percent, from $67.7 million to $30.7 million. Overall, the building lost 21 percent of its market value.
-Kushner Companies 333 East 9th Street in the East Village declined from $6 million market value to $2.9 million.
-Ben Shaoul, as manager of the building at 102 Green Street in Soho, saw a 45 percent drop in the market value from $13.6 million to $7.5 million. Shaoul controls the building which SL Green Realty sold in two transactions in 2017, one for 90 percent valued at $43.5 million and another unrecorded for the remaining 10 percent. Shaoul is tied to the building through city Department of Buildings filings. Shaoul filed plans in June 2017 to convert the upper floors to retail.
–Lodge Works Partners’ hotel at 158 Tillary Street in Downtown Brooklyn saw a 43 percent decline from $26.2 million to $15 million. The building, completed in 2016, has a $45 million loan.
There is an upside to the decline in value, which is that property taxes decline along with a decline in market value.
Many of the thousands of properties that saw large declines in value were development sites, with little or no income, so the city lowered the market value with the expectation that the market value will rise substantially once the property can be cash-flowing again.
PincusCo looked at city properties with declines greater than 20 percent in market value, which is the city’s estimate of value using landlord-provided income and expense filings, known as RPIEs.
The analysis only covered properties that were the same legal structure as the year before (so excluded properties that converted from a non-condo entity to a condo entity); and excluded properties that had a market value of less than $1 million. Condo buildings were