Edward Ostad pays $8.5M for two mixed-use properties in Hell’s Kitchen

Edward Ostad through the entity 817-819 9 LLC paid $8.5 million to Bongju Shim and Ann Hwa Yup Shim for the corner, six-unit mixed-use building at 817 9th Avenue in Hell’s Kitchen, Manhattan and the midblock five-unit mixed-use building at 819 9th Avenue in Hell’s Kitchen, Manhattan.
The deal closed on April 28, 2022 and was recorded on May 17, 2022. The two properties have 12,425 square feet of built space and 10,232 square feet of additional air rights for a total buildable of 22,647 square feet according to PincusCo analysis of city data. The sale price per built square foot is $684 and the price per buildable square foot is $375 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 Bongju Shim and Ann Hwa Yup Shim was Bongju Shim and Ann Hwa Yup Shim. The signatory for Edward Ostad was Edward Ostad.

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 817 9th Avenue.

Prior sales and revenue

Prior to this transaction, Pincusco has records that the buyer Edward Ostad purchased six properties in five transactions for a total of $28.8 million and has no record it sold any properties over the past 24 months.
The seller Bongju Shim 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 Bong Ju Shim, individual owner and Shimon Magrill, agent. The business entity is Manhattan Management Group, Llc.

The property

The 817 9th Avenue parcel has frontage of 25 feet and is 75 feet deep with a total lot size of 1,881 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 $4.1 million.

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 $400 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 Hell’s Kitchen, the bulk, or 39 percent of the 45 million square feet of commercial built space are residential elevator buildings, with specialty buildings next occupying 17 percent of the space. In sales, Hell’s Kitchen has 3.5 times the average sales volume among other neighborhoods with $972.1 million in sales volume in the last two years and is the 13th highest in Manhattan. For development, Hell’s Kitchen has 1.3 times the average amount of major developments relative to other neighborhoods and is the 18th highest in Manhattan. It had 1.2 million square feet of commercial and multi-family construction under development in the last two years, which represents 3 percent of the neighborhood’s built space. There were three pre-foreclosure suit filed among other mixed-use buildings in the past 12 months.

The block

On the tax block of 817 9th Avenue, PincusCo has identified the owners of three of the 27 commercial properties representing 42,262 square feet of the 589,922 square feet. The largest owner is Brusco Group, followed by 446 West 55 Street Group LLC and then Giuseppe Galvano. There are two active new building construction projects totaling 64,676 square feet. The largest is a 28-unit, 32,726-square-foot R-2 building developed by Manwei You with plans filed October 1, 2018 and permitted January 17, 2020. The second largest is a 101-unit, 31,950-square-foot R-1 building developed by Samir Gandhi with plans filed July 15, 2013 and it has not been permitted yet.

The majority, or 45 percent of the 614,253 square feet of built space are residential elevator buildings, with industrial buildings next occupying 20 percent of the space.

The buyer

The PincusCo database currently indicates that Edward Ostad owned at least 20 commercial properties with 512,786 square feet and a city-determined market value of $84.5 million. (Market value is typically about 50% of actual value.) The portfolio has $177.5 million in debt, with top three lenders as Signature Bank, New York Community Bank, and Greystone & Co. respectively. Within the portfolio, the bulk, or 56 percent of the 512,786 square feet of built space are residential elevator properties, with residential walkup properties next occupying 40 percent of the space. The bulk, or 61 percent of the built space, is in Manhattan, with Bronx next at 23 percent of the space.

Surrounding

Within a 400-foot radius of 817 9th Avenue, PincusCo identified five commercial real estate items of interests occurred over the past 24 months.
One of those five items was a sale which Migdal Management bought the 8,364-square-foot, 11-unit rental (D6) on 809 9th Avenue for $5.9 million from Samuel Erlich on June 2, 2021.
Of those five items, four were loans above $5 million totaling $30 million. The most recent of the four was Julian Romano which borrowed $6.2 million from New York Community Bank secured by the 10,025-square-foot, 12-unit rental (C7) on 802 9th Avenue on March 8, 2022.

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