Davean Holdings pays $25.5M for 3 properties in East Village

Davean Holdings through the entity 163-167 First Avenue Owner LLC paid $25.5 million to Nathan Halegua and Martin Newman through the entity East Village At First Avenue Partners L.P. for six-unit mixed-use building (S5) at 167 1st Avenue in East Village, Manhattan, eight-unit residential walkup building (C7) at 165 1st Avenue in East Village, Manhattan, and four-unit mixed-use building (S9) at 163 1st Avenue in East Village, Manhattan.
The deal closed on August 10, 2022 and was recorded on August 22, 2022. The three properties have 28,224 square feet of built space and 2,961 square feet of additional air rights for a total buildable of 29,336 square feet according to PincusCo analysis of city data. The sale price per built square foot is $903 and the price per buildable square foot is $869 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 signatory for Nathan Halegua and Martin Newman was Nathan Halegua. The signatory for Davean Holdings was Sean Lefkovits.

Because multiple properties have been transacted, some of the following sections will follow the property with the largest assessed value, which in this case, is the property on 167 1st Avenue.

Prior sales and revenue

Prior to this transaction, Pincusco has records that the buyer Davean Holdings purchased 15 properties in 14 transactions for a total of $77.2 million and sold one properties in one transactions for a total of $2.2 million over the past 24 months.
The seller Nathan Halegua 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 Martin Newman, head officer and Eric Borkowski, officer. The business entity is East Village At First Ave Partners,Lp. Out of the three properties, two with a total of 28,224 square feet of built space generated revenue of $843,444 per year.

The property

The 167 1st Avenue parcel has frontage of 23 feet and is 100 feet deep with a total lot size of 2,317 square feet. The zoning is R7A which allows for up to 4 times floor area ratio (FAR) for residential with inclusionary housing. The city-designated market value for the property in 2022 is $5.4 million.The most recent loan totaled $15 million and was provided by Signature Bank on January 15, 2022.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the properties since September of 2020. In addition, according to city public data, the properties have received two DOB violations, 16 housing violations, and $3,970 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 $644.8 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 272,109 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 the tax block of 167 1st Avenue, PincusCo has identified the owners of 13 of the 37 commercial properties representing 238,279 square feet of the 480,153 square feet. The largest owner is BLDG Management, followed by Jonis Realty and then Kushner Companies.
There are no active new building construction projects on this tax block.

The majority, or 56 percent of the 480,153 square feet of built space are walkup buildings, with elevator buildings next occupying 31 percent of the space.

The seller

The PincusCo database currently indicates that Nathan Halegua owned at least 10 commercial properties in New York City with 192,703 square feet and a city-determined market value of $46.5 million. (Market value is typically about 50% of actual value.) The portfolio has $67.9 million in debt, borrowed from Signature Bank and New York Community Bank. Within the portfolio, the bulk, or 90 percent of the 192,703 square feet of built space are walkup properties, with retail properties next occupying 10 percent of the space. The bulk, or 65 percent of the built space, is in Manhattan, with Bronx next at 24 percent of the space.

Direct link to Acris document. link