First Bank takes back Chelsea retail from HFZ Capital after $16.7M foreclosure

First Bank through the entity BC1, LLC acquired two retail condos at 505 West 19th Street in Chelsea, Manhattan through a foreclosure auction. The sale was the result of a $16.7 million foreclosure case, 850119/2022, in which the lender took back the property from the former owner, Ziel Feldman’s HFZ Capital Group, with a credit bid of $2.7 million. This is not an arms length transaction.
In April 2017, HFZ Capital Group borrowed $16.725 million, secured by the two retail units.
The foreclosure transfer closed on July 18, 2024 and was recorded on July 22, 2024. The two properties have 10,627 square feet of built space according to a PincusCo analysis of city data.
The signatory for the court was referee Clark Whitsett. The signatory for First Bank was Larry Lee. The contract date was July 18, 2024.

Prior sales and revenue

Prior to this transaction, PincusCo has no record that the buyer First Bank had purchased any other properties and has no record it sold any properties over the past 24 months.
The seller HFZ Capital Group had not purchased any other properties and sold or turned over five properties in one transaction for a total of $61 million over the same time period.

The property

The retail condo in Chelsea has 10,627 square feet of built space according to a PincusCo analysis of city data. The parcel has a total lot size of 6,032 square feet. The city-designated market value for the property in 2022 is $3.1 million.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the properties for the past 24 months. In addition, according to city public data, the properties have not received any significant violations in the last year.

Development

For the tax lot buildings, one out of the two buildings received a initial certificate of occupancy in the last ten years. There are no active new building construction projects or major alteration projects with initial costs more than $1 million on this tax lot. On the tax lot, the most recent condominium plan was filed by HFZ HIGHLINE PROPERTY OWNER LLC to create 35 residential units and 2 commercial units in a building at 505 West 19th Street in Chelsea, Manhattan, called 505 West 19th Street Condominium that has a $227.1 million sellout, according to an June 18, 2013 submission to the New York State Attorney General. The principal of the sponsor, HFZ HIGHLINE PROPERTY OWNER LLC, was Ziel Feldman.

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 9th highest sale turnover among other neighborhoods in the city with $1.1 billion in sales volume in the last two years. For development, Chelsea has 1.5 times the average amount of major developments relative to other neighborhoods and is the 19th highest in Manhattan. It had 1.7 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.

The block

On the tax block of 505 West 19th Street, PincusCo has identified the owners of three of the 11 commercial properties representing 98,603 square feet of the 214,615 square feet. The largest owner is David Zwirner Gallery, followed by General Leasing & Management and then Gottesman Family.
On the tax block, there was one new building construction project filed totaling 27,029 square feet. It is a nine-unit, 27,029 square-foot residential (R-2) building submitted by DDG Partners and filed by Christopher Prokop with plans filed April 5, 2016 and permitted April 23, 2019.

The majority, or 45 percent of the 214,615 square feet of built space are specialty buildings, with office buildings next occupying 40 percent of the space.

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