Investor in homeless properties pays $25.6M to Daniel Rabinowitz for shelter in Morris Heights

An investor in homeless shelters, with the signatory Yoel Zagelbaum through the entity 1851 Phelan Propco LLC paid $25.6 million to Daniel Rabinowitz through the entity 1851 Partners II LLC for the midblock homeless shelter building at 1851 Phelan Place in Morris Heights, Bronx.
The deal closed on March 30, 2022 and was recorded on April 11, 2022.

The property has 22,000 square feet of built space according to PincusCo analysis of city data. The sale price per built square foot is $1,161 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.)
The seller bought the property on June 6, 2016, for $7.5 million. The signatory for Daniel Rabinowitz was Daniel Rabinowitz. The signatory for 1851 Phelan Propco LLC was Yoel Zagelbaum. This is a 144-bed homeless shelter called Phelan Place. An investor in homeless shelters with the signatory Yoel Zagelbaum was the buyer. The city sued the previous operator of the homeless shelter, which was not the same as the owner, in 2020 for alleged fraudulent billing.

Prior sales and revenue

=The former owners according to the Department of Housing Preservation and Development includes Daniel Rabinowitz, head officer and Thomas Bransky, lessee. The business entities are Childrens Community Services Inc, Brc Management Group Llc., and 1851 Parnters Llc.

The property

The 1851 Phelan Place parcel has frontage of 50 feet and is 100 feet deep with a total lot size of 5,000 square feet. The zoning is R5 which allows for up to 1.25 times floor area ratio (FAR) for residential. The city-designated market value for the property in 2022 is $1.9 million.

Violations and lawsuits

The property was not involved in any lawsuits or bankruptcies in the past years. In addition, according to city public data, the property has received $200 in OATH penalties in the last year.

Development

For the tax lot building, it received its initial certificate of occupancy on January 19, 2018. 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 Morris Heights, the majority, or 61 percent of the 17.8 million square feet of commercial built space are residential elevator buildings, with residential walkup buildings next occupying 18 percent of the space. In sales, Morris Heights has near average sales volume among other neighborhoods with $244.6 million in sales volume in the last two years and is the 3rd highest in Bronx. For development, Morris Heights has 1.5 times the average amount of major developments relative to other neighborhoods and is the 6th highest in Bronx. It had 1.4 million square feet of commercial and multi-family construction under development in the last two years, which represents 8 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of 17 of the 45 commercial properties representing 647,682 square feet of the 1,409,641 square feet. The largest owner is New York City Housing Authority, followed by Benzion Wachsman and then Jacob Schwartz. There are no active new building construction projects on this tax block.

The majority, or 40 percent of the 1.9 million square feet of built space are residential walkup buildings, with residential elevator buildings next occupying 31 percent of the space.

Surrounding

Within a 400-foot radius of 1851 Phelan Place, Pincusco identified five commercial real estate items of interests occurred over the past 24 months.
One of those five items was a sale which Israel Cohen bought the 64,614-square-foot, 59-unit rental (D1) on 1860 Billingsley Terrace for $8 million from Hysen Mehmetaj on June 23, 2021.
Of those five items, four were loans above $5 million totaling $42.9 million. The most recent of the four was David Kleiner which borrowed $5.4 million from JPMorgan Chase secured by the 47,400-square-foot, 52-unit rental (D7) on 170 West Burnside Avenue on August 11, 2021.

Clarification: The city sued the previous operator.

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