Fetner, Stockbridge pay $62.6M to Sky Management for 82-unit rental in Lenox Hill

UPDATED 9:35 a.m., July 12, 2024: Fetner Properties and Stockbridge Capital Group through the entity 501 East 74th Street Owner, LLC paid $62.6 million to Sky Management through the entity Four Mon LLC for the 82-unit residential elevator building (D3) at 1394 York Avenue at the corner of East 74th Street, in Lenox Hill, Manhattan.
To finance the purchase, the buyers obtained a $36 million loan from New York Life Insurance Company.
The deal closed on June 28, 2024 and was recorded on July 11, 2024. The property has 71,750 square feet of built space according to a PincusCo analysis of city data. The sale price per built square foot is $873 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 Sky Management was Robert Ohebshalom. The signatory for Fetner Properties and Stockbridge Capital Group was August Heath. The contract date was May 3, 2024. Robert Ohebshalom bought the property in 1977 with his wife Rosa Minu Ohebshalom, and the current building was built in 2014.

A CBRE team lead by Daniel Kaplan and Doug Middleton represented the seller.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer Fetner Properties had purchased one other property, 85 East End Avenue, for $75 million and has no record it sold any properties over the past 24 months.
The seller Sky Management had not purchased any other properties and sold one property in one transaction for a total of $2.2 million over the same time period. The former owners according to the Department of Housing Preservation and Development includes Robert Ohebshalom, head officer and Rosa Ohebshalom, officer. The business entities are Sky Management Corp. and Golden Asset, LLC.

The property

The residential elevator building with 82 residential units in Lenox Hill has 71,750 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 62 feet and is 98 feet deep with a total lot size of 6,096 square feet. The zoning is R10 which allows for up to 10 times floor area ratio (FAR) for residential with inclusionary housing. The property has a 421A exemption that started in 2019 and expires in 2029. The city-designated market value for the property in 2022 is $25.3 million.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the property for the past 24 months. In addition, according to city public data, the property has received $9,100 in OATH penalties in the last year.

Development

For the tax lot building, it received its initial certificate of occupancy on April 12, 2016. There are no active new building construction projects or major alteration projects with initial costs more than $1 million on this tax lot.

The block

On this tax block, PincusCo has identified the owners of four of the five commercial properties representing 116,898 square feet of the 127,666 square feet. The largest owner is Sky Management, followed by Elliot Sohayegh and then Consolidated Edison.
There are no active new building construction projects on this tax block.

The majority, or 100 percent of the 127,666 square feet of built space are elevator buildings, with specialty buildings next occupying 0 percent of the space.

The seller

The PincusCo database currently indicates that Sky Management owned at least 24 commercial properties with 692 residential units in New York City with 507,934 square feet and a city-determined market value of $172.7 million. (Market value is typically about 50% of actual value.) The portfolio has $237.7 million in debt, with top three lenders as M&T Bank, MF1 Capital, and Signature Bank respectively. Within the portfolio, the bulk, or 60 percent of the 507,934 square feet of built space are elevator properties, with walkup properties next occupying 39 percent of the space. They are all located in Manhattan.

The buyer

The PincusCo database currently indicates that Fetner Properties owned at least eight commercial properties with 960 residential units in New York City with 638,489 square feet and a city-determined market value of $130.9 million. (Market value is typically about 50% of actual value.) The portfolio has $88.5 million in debt, borrowed from Wells Fargo. Within the portfolio, the bulk, or 97 percent of the 638,489 square feet of built space are elevator properties, with industrial properties next occupying 2 percent of the space. The bulk, or 98 percent of the built space, is in Manhattan, with Queens next at 2 percent of the space.
The PincusCo database currently indicates that Stockbridge Capital Group owned at least four commercial properties with 374 residential units in New York City with 376,412 square feet and a city-determined market value of $104.8 million. (Market value is typically about 50% of actual value.) The portfolio has $73.4 million in debt, borrowed from Wells Fargo. Within the portfolio, all identified are elevator properties. The bulk, or 56 percent of the built space, is in Brooklyn, with Manhattan next at 44 percent of the space.

Correction: A prior version of this post did not mention that Fetner Properties had purchased 85 East End Avenue in June 2024, for $75 million. In addition, the sales brokers were added.

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