Frank Alessio, Seth Levine pays $9.8M to Fairstead for retail in Lower East Side

Frank Alessio and Seth Levine through the entity 92 Ludlow Land Corp paid $9.8 million to Fairstead through the entity 92 Ludlow Owner LLC for the mixed-use building (K1) at 92 Ludlow Street in Lower East Side, Manhattan.
The deal closed on July 15, 2022 and was recorded on July 26, 2022. The property has 6,193 square feet of built space and 5,395 square feet of additional air rights for a total buildable of 11,599 square feet according to PincusCo analysis of city data. The sale price per built square foot is $1,584 and the price per buildable square foot is $845 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 November 30, 2016, for $9 million. The signatory for Fairstead was Jeffrey Goldberg. The signatory for Frank Alessio and Seth Levine was Seth Levine. The buyers already occupy the building through the event space company Hotel Chantelle, which is not a hotel. Frank Alessio is the president of the purchasing entity, and Seth Levine is a vice president. Simultaneously with the purchase, the buyers obtained a Small Business Administration loan and another loan from non-bank lender Harvest Commercial Capital.

Prior sales and revenue

Prior to this transaction, PincusCo has no record that the buyer Frank Alessio had purchased any other properties and has no record it sold any properties over the past 24 months.
The seller Fairstead had not purchased any other properties and sold one property in one transaction for a total of $10.4 million over the same time period. The 6,193-square-foot property generated revenue of $290,042 or $47 per square foot, according to the most recent income and expense figures.

The property

The 92 Ludlow Street parcel has frontage of 38 feet and is 87 feet deep with a total lot size of 3,372 square feet. The zoning is C6-1 which allows for up to 6 times floor area ratio (FAR) for commercial and up to 3.44 times FAR for residential. The city-designated market value for the property in 2022 is $1 million.

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 $6,250 in ECB penalties and $6,250 in OATH penalties in the last year.

Development

For the tax lot building, it received its initial alteration certificate of occupancy on July 17, 2013. 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 Lower East Side, the bulk, or 50 percent of the 23.9 million square feet of commercial built space are elevator buildings, with walkup buildings next occupying 21 percent of the space. In sales, Lower East Side has 2.7 times the average sales volume among other neighborhoods with $883.6 million in sales volume in the last two years and is the 16th highest in Manhattan. For development, Lower East Side has 2.9 times the average amount of major developments relative to other neighborhoods and is the 9th highest in Manhattan. It had 3 million square feet of commercial and multi-family construction under development in the last two years, which represents 12 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 six of the 25 commercial properties representing 54,329 square feet of the 305,118 square feet. The largest owner is Entity with address at Mark J. Nussbaum & Associates, followed by 33 Equities and then Randy Settenbrino. There are two active new building construction projects totaling 171,121 square feet. The largest is a 55-unit, 139,135-square-foot R-2 building developed by Peter Febo with plans filed September 11, 2014 and permitted March 15, 2016. The second largest is a 41-unit, 31,986-square-foot R-2 building developed by Sharon Huang with plans filed March 23, 2020 and it has not been permitted yet.

The majority, or 58 percent of the 240,350 square feet of built space are walkup buildings, with mixed-use buildings next occupying 20 percent of the space.

The seller

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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