Hee Nam Bae pays $12M for mixed-use in Kips Bay

Hee Nam Bae, who in May sold three buildings for $50.1 million, paid $12 million to Kemal Ilgar Peker and Ahmet Yildizel through the entity 386 Third LLC for the mixed-use building (K2) at 386 Third Avenue just south of 28th Street, in Kips Bay, Manhattan. The expected use is cash flowing. Hee Nam Bae bought the building through the entity City Lights Properties LLC.
The deal closed on August 1, 2024 and was recorded on August 8, 2024. The property has 8,295 square feet of built space and 21,319 square feet of additional air rights for a total buildable of 29,610 square feet according to a PincusCo analysis of city data. The sale price per built square foot is $1,446 and the price per buildable square foot is $405 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 sellers bought the property on March 2, 2016, for $12 million. The signatory for Kemal Ilgar Peker and Ahmet Yildizel was Ilgar Peker. The signatory for Hee Nam Bae was Jay H. Kim. The contract date was August 1, 2024. The sale was financed with a $4.8 million purchase money mortgage. Hee Nam Bae earlier this year sold three buildings just seven blocks south, at 252, 254 and 258 Third Avenue, for $51 million to Legion Investment Group, for a ground up development.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer Hee Nam Bae purchased two properties in one transaction for a total of $5.5 million and sold three properties in three transactions for a total of $51.2 million over the past 24 months.
The seller Kemal Ilgar Peker had not purchased any other properties and had not sold any properties over the same time period.

The property

The mixed-use building in Kips Bay has 8,295 square feet of built space and 21,319 square feet of additional air rights for a total buildable of 29,610 square feet according to a PincusCo analysis of city data. The parcel has frontage of 24 feet and is 120 feet deep with a total lot size of 2,961 square feet. The zoning is C2-8 which allows for up to 2 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 $3.2 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 not received any significant violations 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 neighborhood

In Kips Bay, The bulk, or 50 percent of the 21.6 million square feet of commercial built space are elevator buildings, with specialty buildings next occupying 32 percent of the space. In sales, Kips Bay has had very little sales volume relative to other neighborhoods with $167.6 million in sales volume in the last two years. For development, Kips Bay has had very little major development activity relative to other neighborhoods.It had 916,902 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.

The block

On this tax block, PincusCo has identified the owners of 16 of the 44 commercial properties representing 409,792 square feet of the 1,076,980 square feet. The largest owner is Algin Management, followed by Atlantic Stars Hotel & Cruises and then Caiola Family.
On the tax block, there was one new building construction project filed totaling 20,480 square feet. It is a 11-unit, 20,480 square-foot residential (R-2) building submitted by Charlie Sinha with plans filed April 18, 2017 and permitted January 15, 2019.

The majority, or 46 percent of the 1.1 million square feet of built space are office buildings, with elevator buildings next occupying 30 percent of the space.

The seller

The PincusCo database currently indicates that Kemal Ilgar Peker owned at least one commercial property with eight residential units in New York City with 15,688 square feet and a city-determined market value of $8.5 million. (Market value is typically about 50% of actual value.) The portfolio has $5 million in debt, borrowed from Dime Community Bank and PIMCO. The portfolio consists of at least a single elevator property. It is located in Manhattan.
The PincusCo database currently indicates that Ahmet Yildizel owned at least one commercial property with 36 residential units in New York City with 32,370 square feet and a city-determined market value of $1.7 million. (Market value is typically about 50% of actual value.) The portfolio has $5.5 million in debt, borrowed from Santander Bank. The portfolio consists of at least a single walkup property. It is located in Queens.

The buyer

The PincusCo database currently indicates that Hee Nam Bae owned at least two commercial properties in New York City with 9,895 square feet and a city-determined market value of $1.5 million. (Market value is typically about 50% of actual value.) Within the portfolio, the bulk, or 100 percent of the 9,895 square feet of built space are retail properties, with development properties next occupying 0 percent of the space. They are all located in Manhattan.

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