Fairstead pays $10.8M for 6-unit mixed-use in Chelsea

Affordable housing focused owner Fairstead through the entity 725 Sixth Avenue Owner LLC paid $10.8 million to Simon D. Abeckaser through the entity 725 6th Ave. Management LLC for the six-unit mixed-use building (S5) at 725 Sixth Avenue in Chelsea, Manhattan.
The deal closed on August 4, 2022 and was recorded on August 19, 2022. The property has 6,272 square feet of built space and 10,498 square feet of additional air rights for a total buildable of 16,770 square feet according to PincusCo analysis of city data. The sale price per built square foot is $1,721 and the price per buildable square foot is $644 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 Simon D. Abeckaser was Simon D. Abeckaser. The signatory for Fairstead was Jeffrey Goldberg.

The purchased was financed with a $5.3 million loan from Signature Bank.

The property is adjacent to an 80-unit cooperative building to the south and to the north a 5,752-square-foot commercial property owned by the individual investor Back Kim, who purchased it in 2013 for $8.15 million, according to property records.

Prior sales and revenue

Prior to this transaction, PincusCo has no record that the buyer Fairstead had purchased any other properties and sold two properties in two transactions for a total of $20.2 million over the past 24 months.
The seller Simon D. Abeckaser had not purchased any other properties and had not sold any properties over the same time period. The 6,272-square-foot property generated revenue of $275,717 or $44 per square foot, according to the most recent income and expense figures.

The property

The 725 6th Avenue parcel has frontage of 24 feet and is 68 feet deep with a total lot size of 1,677 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 $4 million.The most recent loan totaled $5.5 million and was provided by Deepdale Funding NY II LLC on September 30, 2021.

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 $8,500 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 $2.7 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 13th highest in Manhattan. It had 2.2 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 seller

The PincusCo database currently indicates that Simon D. Abeckaser owned at least one commercial property in New York City with 6,272 square feet and a city-determined market value of $4 million. (Market value is typically about 50% of actual value.) The portfolio has $5.5 million in debt, borrowed from Deepdale Funding NY II LLC. The portfolio consists of at least a single mixed-use property. It is located in Manhattan.

The buyer

The PincusCo database currently indicates that Fairstead owned at least 89 commercial properties in New York City with 3,935,034 square feet and a city-determined market value of $330.5 million. (Market value is typically about 50% of actual value.) The portfolio has $371.3 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 3,935,034 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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