GP Properties pays $32M to Melohn Properties for residential elevator in Midtown West

GP Properties through the entity 105 West 55th Street Associates LLC paid $32 million to Melohn Properties through the entity The Melohn Foundation, Inc. for the midblock 52-unit residential elevator building at 105 West 55th Street in Midtown West, Manhattan. PincusCo exclusively reported in January that GP Properties was in contract to buy the building.
The deal closed on March 10, 2022 and was recorded on March 30, 2022. The property has 54,838 square feet of built space and 28,502 square feet of additional air rights for a total buildable of 83,340 square feet according to PincusCo analysis of city data. The sale price per built square foot is $583 and the price per buildable square foot is $383 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 Melohn Properties was Barry Goldberg. The signatory for GP Properties was Gideon Platt. Gideon Platt is the owner of GP Properties.

Prior sales and revenue

Prior to this transaction, PincusCo has no record that the buyer GP Properties had purchased any other properties and has no record it sold any properties over the past 24 months.
The seller Melohn Properties had not purchased any other properties and sold one properties in one transactions for a total of $90.5 million over the same time period. The former owners according to the Department of Housing Preservation and Development includes Alfons Melohn, head officer and Leon Melohn, officer. The business entities are Brg Managment Llc and The Melohn Foundation, Inc. The 54,838-square-foot property generated revenue of $2.4 million or $44 per square foot, according to the most recent income and expense figures.

The property

The 105 West 55th Street parcel has frontage of 83 feet and is 100 feet deep with a total lot size of 8,334 square feet. The zoning is C6-6 which allows for up to 15 times floor area ratio (FAR) for commercial and up to 10 times FAR for residential with inclusionary housing. The city-designated market value for the property in 2022 is $13.6 million.

Violations and lawsuits

The property was involved in one court filing and no bankruptcies over the past two years. The court filing was a $32 million petition seeking the court’s permission for the nonprofit Melohn Foundation to sell the building filed on January 20, 2022. In addition, according to city public data, the property has received four DOB violations and one housing violation in the last year.

Development

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 Midtown West, the majority, or 69 percent of the 82.2 million square feet of commercial built space are office buildings, with hotel buildings next occupying 13 percent of the space. In sales, Midtown West has the 7th highest sale turnover among other neighborhoods in the city with $1.6 billion in sales volume in the last two years. For development, Midtown West is the 3rd most active neighborhood among other neighborhoods. It had 8.5 million square feet of commercial and multi-family construction under development in the last two years, which represents 10 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of four of the 13 commercial properties representing 977,682 square feet of the 1,830,389 square feet. The largest owner is Waterman Interests, followed by Zucker Organization and then Savanna. There is one active new building construction project totaling 75,083 square feet. It is a 75,083-square-foot office (B) building developed by Eric Desimone with plans filed March 28, 2017 and permitted June 29, 2018.

The majority, or 43 percent of the 1.5 million square feet of built space are office buildings, with residential elevator buildings next occupying 28 percent of the space.

The buyer

The PincusCo database currently indicates that GP Properties owned at least 14 commercial properties with 155,956 square feet and a city-determined market value of $25 million. (Market value is typically about 50% of actual value.) The portfolio has $18.2 million in debt, borrowed from New York Community Bank and Bridge Investment Group. Within the portfolio, the bulk, or 88 percent of the 155,956 square feet of built space are residential walkup properties, with residential elevator properties next occupying 12 percent of the space. The bulk, or 84 percent of the built space, is in Manhattan, with Brooklyn next at 16 percent of the space.

Surrounding

Within a 400-foot radius of 105 West 55th Street, PincusCo identified two commercial real estate items of interests occurred over the past 24 months.
Of those two items, two were loans above $5 million totaling $303.6 million. The most recent of the two was Savanna which borrowed $105 million from Cottonwood Management secured by the 87,573-square-foot, one-unit office building (O4) on 106 West 56th Street on September 23, 2021.

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