Highpoint Property pays $4.4M for mixed-use in Chelsea

Highpoint Property Group through the entity AH Chelsea Owner LLC paid $4.4 million to Bergman Family through the entity Bergman, Executor, Peter for the midblock mixed-use building at 224 West 20th Street in Chelsea, Manhattan.
The deal closed on April 8, 2022 and was recorded on May 3, 2022. The property has 4,298 square feet of built space and 4,899 square feet of additional air rights for a total buildable of 9,200 square feet according to PincusCo analysis of city data. The sale price per built square foot is $1,023 and the price per buildable square foot is $478 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 Bergman Family was Peter Bergman, Vera Buettner, and Kostia Bergman. The signatory for Highpoint Property Group was Drew Popkin.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer Highpoint Property Group purchased seven properties in six transactions for a total of $35.4 million and sold one property in one transaction for a total of $13.2 million over the past 24 months.
The seller Bergman Family had not purchased any other properties and had not sold any properties over the same time period. The former owners according to the Department of Housing Preservation and Development includes Anni Bergman, individual owner and Peter Bergman, site manager.

The property

The 224 West 20th Street parcel has frontage of 25 feet and is 87 feet deep with a total lot size of 2,300 square feet. The lot is irregular. The zoning is R8B which allows for up to 4 times floor area ratio (FAR) for residential. The city-designated market value for the property in 2022 is $8.1 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 $600 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 $5 million on this tax lot.

The neighborhood

In Chelsea, the bulk, or 35 percent of the 62.6 million square feet of commercial built space are residential elevator buildings, with office buildings next occupying 30 percent of the space. In sales, Chelsea has the 2nd highest sale turnover among other neighborhoods in the city with $2.3 billion in sales volume in the last two years. For development, Chelsea has 1.4 times the average amount of major developments relative to other neighborhoods and is the 16th highest in Manhattan. It had 1.3 million square feet of commercial and multi-family construction under development in the last two years, which represents 2 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of seven of the 42 commercial properties representing 61,052 square feet of the 350,815 square feet. The largest owner is Alberson Gonzalez, followed by Larry Tauber and then Jay Wartski. There are no active new building construction projects on this tax block.

The majority, or 39 percent of the 420,360 square feet of built space are residential walkup buildings, with residential elevator buildings next occupying 28 percent of the space.

The buyer

The PincusCo database currently indicates that Highpoint Property Group owned at least 16 commercial properties with 127,780 square feet and a city-determined market value of $46.3 million. (Market value is typically about 50% of actual value.) The portfolio has $87.5 million in debt, with top three lenders as East West Bank, Bank Leumi, and IberiaBank respectively. Within the portfolio, the bulk, or 64 percent of the 127,780 square feet of built space are residential walkup properties, with residential elevator properties next occupying 20 percent of the space. The bulk, or 56 percent of the built space, is in Brooklyn, with Manhattan next at 44 percent of the space.

Surrounding

Within a 400-foot radius of 224 West 20th Street, PincusCo identified five commercial real estate items of interests occurred over the past 24 months.
Of those five items, one was for major renovation including a certificate of occupancy change. It was a permit issued on February 10, 2021 for the $1.2 million renovation of 7,563-square-foot R-2 building with six residential units at 231 West 20th Street.
Of those five items, two were sales above $5 million totaling $17 million. The most recent of the two was Witnick Real Estate Partners which bought the 11,864-square-foot, 47-unit rental (C1) on 206 West 21st Street for $10.2 million from Paul Kampa on March 9, 2022.
Of those five items, two were loans above $5 million totaling $13.5 million. The most recent of the two was Witnick Real Estate Partners which borrowed $7.2 million from Customers Bank secured by the 11,864-square-foot, 47-unit rental (C1) on 206 West 21st Street on March 9, 2022.

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