Genesis Companies, Lemor sign 99-year leases in Harlem with NYCHA valued at $112M, borrow $384M

Genesis Companies and Lemor Development Group signed 99-year ground lease agreements with the landlord New York City Housing Authority valued at $111.9 million for 43 properties in Harlem, and at the same time borrowed $383.6 million for the rehabilitation of approximately 660 units in those buildings, financed by the New York City Housing Development Corporation.
The two 99-year ground leases terminate on September 25, 2123.
According to a HDC press release, with the financing, the new property owners, “begin fully rehabilitating over 660 apartments, as well as shared spaces, grounds, and building infrastructure, to improve residents’ quality of life. The PACT [Permanent Affordability Commitment Together] program also maintains residents’ rights as the development transitions from Section 9 to Project-Based Section 8 and preserves affordable rents for all households.”

In the first lease agreement, Genesis Companies, Community League of the Heights, and Lemor Development Group through the entity Cloth Sam City Housing Development Fund Corp signed the ground lease valued at $105.2 million with the New York City Housing Authority for the ground lease under the 88-unit residential walkup building (C7) at 2537 Adam C Powell Boulevard in Harlem, Manhattan, 62-unit residential elevator building (D1) at 2441 Adam C Powell Boulevard in Harlem, Manhattan, and 28-unit residential walkup building (C7) at 2453 Adam C Powell Boulevard in Harlem, Manhattan. The expected use is cash flowing.
The deal closed on September 26, 2024 and was recorded on October 15, 2024. The 41 properties have 652,666 square feet of built space and 40,463 square feet of additional air rights according to a PincusCo analysis of city data. The sale price per built square foot is $161 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.)

In the second lease agreement, the Genesis Companies, Community League of the Heights, and Lemor Development Group through the entity Sam City Community Center, LLC signed the ground lease valued at $6.8 million with the New York City Housing Authority for the specialty building (P5) at 107 West 143rd Street in Harlem, Manhattan and industrial building (G7) at 111 West 143rd Street in Harlem, Manhattan. The expected use is cash flowing.

The signatory for New York City Housing Authority was Jonathan Gouveia. The signatory for Genesis Companies, Community League of the Heights, and Lemor Development Group was Karim Hutson and Yvonne Stennett.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer Genesis Companies purchased two properties in two transactions for a total of $12.9 million and has no record it sold any properties over the past 24 months.
The seller New York City Housing Authority purchased 10 properties in two transactions for a total of $151.5 million and sold 186 properties in seven transactions for a total of $240.1 million over the same time period. The former owners according to the Department of Housing Preservation and Development includes David Chin, head officer and Dimitri Naylor, officer. The business entity is NYCHA. Out of the 41 properties, 29 with a total of 652,666 square feet of built space generated revenue of $11.8 million per year.

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 received one DOB violation, $37,925 in ECB penalties, and $40,395 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 $1 million on this tax lot.

The block

On the tax block of 2537 Adam C Powell Blvd, PincusCo has identified the owners of two of the three commercial properties representing 65,250 square feet of the 457,048 square feet. The two identified owners are New York City Housing Authority and City Of New York.
There are no active new building construction projects on this tax block.

The majority, or 86 percent of the 457,048 square feet of built space are office buildings, with walkup buildings next occupying 14 percent of the space.

The seller

The PincusCo database currently indicates that New York City Housing Authority owned at least 593 commercial properties with 162,738 residential units in New York City with 135,679,525 square feet and a city-determined market value of $11.5 billion. (Market value is typically about 50% of actual value.) The portfolio has $79.3 million in debt, borrowed from Breaking Ground. Within the portfolio, the bulk, or 96 percent of the 135,679,525 square feet of built space are elevator properties, with walkup properties next occupying 4 percent of the space. The bulk, or 34 percent of the built space, is in Manhattan, with Brooklyn next at 31 percent of the space.

The buyer

The PincusCo database currently indicates that Genesis Companies owned at least 38 commercial properties with 491 residential units in New York City with 485,420 square feet and a city-determined market value of $54.5 million. (Market value is typically about 50% of actual value.) The portfolio has $30.4 million in debt, borrowed from Community Preservation Corporation. Within the portfolio, the bulk, or 73 percent of the 485,420 square feet of built space are walkup properties, with elevator properties next occupying 27 percent of the space. They are all located in Manhattan.
The PincusCo database currently indicates that Lemor Development Group owned at least nine commercial properties with 227 residential units in New York City with 260,706 square feet and a city-determined market value of $15.8 million. (Market value is typically about 50% of actual value.) The portfolio has $24.7 million in debt, borrowed from Walker & Dunlop and Enterprise Community Partners. Within the portfolio, the bulk, or 79 percent of the 260,706 square feet of built space are elevator properties, with walkup properties next occupying 19 percent of the space. The bulk, or 98 percent of the built space, is in Manhattan, with Bronx next at 2 percent of the space.
The PincusCo database currently indicates that Community League Of The Heights owned at least three commercial properties with 65 residential units in New York City with 56,384 square feet and a city-determined market value of $3.1 million. (Market value is typically about 50% of actual value.) Within the portfolio, all identified are walkup properties. They are all located in Manhattan.

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