Fairstead pays $10.2M for 4-unit mixed-use in Chelsea

729 Sixth Avenue (Credit - Google)
Fairstead through the entity 729 Sixth Avenue Owner LLC paid $10.2 million to the Gary Charles Kasakian estate and Steven Sarkisian through the entity 729 Sixth Avenue Manhattan LLC for the four-unit mixed-use building (K9) at 729 Sixth Avenue in Chelsea, Manhattan.
The deal closed on August 25, 2022 and was recorded on September 2, 2022. The property has 6,444 square feet of built space and 9,914 square feet of additional air rights for a total buildable of 16,360 square feet according to PincusCo analysis of city data. The sale price per built square foot is $1,590 and the price per buildable square foot is $626 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 Gary Charles Kasakian estate and Steven Sarkisian was Steven Sarkisian. The signatory for Fairstead was Jeffrey Goldberg.
Prior sales and revenue
Prior to this transaction, PincusCo has records that the buyer Fairstead purchased one property in one transaction for a total of $10.8 million and sold three properties in three transactions for a total of $38.7 million over the past 24 months.
The seller Gary Charles Kasakian estate had not purchased any other properties and had not sold any properties over the same time period. The 6,444-square-foot property generated revenue of $313,645 or $49 per square foot, according to the most recent income and expense figures.
The property
The 729 Sixth Avenue parcel has frontage of 24 feet and is 66 feet deep with a total lot size of 1,636 square feet. The zoning is C6-4X which allows for up to 10 times floor area ratio (FAR) for commercial and up to 10 times FAR for residential with inclusionary housing. The city-designated market value for the property in 2022 is $1.5 million.
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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 $980 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 Chelsea, the bulk, or 35 percent of the 52.5 million square feet of commercial built space are office buildings, with elevator buildings next occupying 28 percent of the space. In sales, Chelsea has the 2nd highest sale turnover among other neighborhoods in the city with $2.8 billion in sales volume in the last two years. For development, Chelsea has 2.1 times the average amount of major developments relative to other neighborhoods and is the 12th highest in Manhattan. It had 2.3 million square feet of commercial and multi-family construction under development in the last two years, which represents 4 percent of the neighborhood’s built space. There was one pre-foreclosure suit filed among other mixed-use buildings in the past 12 months.
The block
On this tax block, PincusCo has identified the owners of 10 of the 27 commercial properties representing 509,077 square feet of the 815,936 square feet. The largest owner is Magna Hospitality Group, followed by Mack Real Estate Group and then Stellar Management.
There are three active new building construction projects totaling 601,596 square feet. The largest is a 32-unit, 249,045-square-foot B building developed by Jeffrey Dagowitz with plans filed October 28, 2014 and it has not been permitted yet. The second largest is a 21-unit, 212,003-square-foot R-2 building developed by Annette Fisherman with plans filed September 19, 2014 and it has not been permitted yet.
The majority, or 32 percent of the 804,267 square feet of built space are hotel buildings, with office buildings next occupying 29 percent of the space.
The buyer
The PincusCo database currently indicates that Fairstead owned at least 89 commercial properties in New York City with 3,922,736 square feet and a city-determined market value of $328.4 million. (Market value is typically about 50% of actual value.) The portfolio has $362.5 million in debt, with top three lenders as Berkshire Residential Investments, Greystone & Co., and Capital One respectively. Within the portfolio, the bulk, or 66 percent of the 3,922,736 square feet of built space are elevator properties, with walkup properties next occupying 20 percent of the space. The bulk, or 58 percent of the built space, is in Bronx, with Manhattan next at 23 percent of the space.
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