Fortinet pays $50.5M to Atlas Capital Group for commercial in Chelsea

California-based cybersecurity firm Fortinet through the entity Fortinet, Inc. paid $50.5 million to Atlas Capital Group through the entity 548 W 22 Holding LLC for the retail and commercial building (K2) at 548 West 22nd Street in Chelsea, Manhattan. The expected use is owner-occupied.
The deal closed on December 31, 2024 and was recorded on January 3, 2025. The property has 38,100 square feet of built space and 11,257 square feet of additional air rights for a total buildable of 49,375 square feet according to a PincusCo analysis of city data. The sale price per built square foot is $1,325 and the price per buildable square foot is $1,022 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 seller bought the property on June 26, 2014, for $39.9 million. The signatory for Atlas Capital Group was Jeffrey A. Goldberger. The contract date was November 27, 2024.

Prior sales and revenue

Prior to this transaction, PincusCo has no record that the buyer Fortinet had purchased any other properties and has no record it sold any properties over the past 24 months.
The seller Atlas Capital Group purchased 12 properties in two transactions for a total of $344.9 million and had not sold any properties over the same time period.

The property

The retail building in Chelsea has 38,100 square feet of built space and 11,257 square feet of additional air rights for a total buildable of 49,375 square feet according to a PincusCo analysis of city data. The parcel has frontage of 100 feet and is 98 feet deep with a total lot size of 9,875 square feet. The zoning is M1-5 which allows for up to 5 times floor area ratio (FAR) for manufacturing The city-designated market value for the property in 2022 is $20.8 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 $3,840 in OATH penalties in the last year.

Development

For the tax lot building, it received its initial certificate of occupancy on June 10, 2013. On the lot, there is one active major alteration construction project, 121192556, for a 21-unit, 63,440 square-foot R-2 building. The project was submitted by Brett Wolfe with plans filed January 12, 2015 and it has not been permitted yet.

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 6th highest sale turnover among other neighborhoods in the city with $1.3 billion in sales volume in the last two years. For development, Chelsea has 1.7 times the average amount of major developments relative to other neighborhoods and is the 20th highest in Manhattan. It had 1.8 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 retail buildings in the past 12 months.

The block

On this tax block, PincusCo has identified the owners of seven of the 14 commercial properties representing 232,548 square feet of the 347,360 square feet. The largest owner is Michael Weinstein, followed by Erno Bodek and then Albanese Organization.
There are no active new building construction projects on this tax block.

The majority, or 45 percent of the 347,360 square feet of built space are industrial buildings, with retail buildings next occupying 33 percent of the space.

The seller

The PincusCo database currently indicates that Atlas Capital Group owned at least 17 commercial properties with 2,077 residential units in New York City with 1,828,237 square feet and a city-determined market value of $392.7 million. (Market value is typically about 50% of actual value.) The portfolio has $737.9 million in debt, with top three lenders as Square Mile Capital Management, MF1 Capital, and State Street Bank and Trust respectively. Within the portfolio, the bulk, or 87 percent of the 1,828,237 square feet of built space are elevator properties, with D7 properties next occupying 8 percent of the space. The bulk, or 61 percent of the built space, is in Brooklyn, with Manhattan next at 39 percent of the space.

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