Isaac Herskovitz pays $86.75M for Fairstead’s 538-unit property in Harlem

Isaac Herskovitz through the entity 2802-2816 FDB LLC paid $86.75 million for Fairstead’s 538-unit residential walkup building (C7) at 2802 Fredrick Douglass Boulevard in Harlem, Manhattan.
The sale was a complex transaction, in which a buyer with the signatory Shaya Labin through Dunbar Partners BSD LLC put down a $3 million deposit and signed a contract in July 2022, but could not close and so that entity but now with the signatory David Goldwasser of FIA Capital Advisors, filed to place the entity in bankruptcy. Goldwasser then sold the contract to Isaac Herskovitz’s new buyer entity.
The deal closed on June 2, 2023 and was recorded on June 20, 2023. The property has 436,115 square feet of built space and 81,173 square feet of additional air rights for a total buildable of 517,104 square feet according to a PincusCo analysis of city data. The sale price per built square foot is $198 and the price per buildable square foot is $167 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 27, 2013, for $55 million. The signatory for Fairstead was Jeffrey Goldberg. The signatory for Isaac Herskovitz was Chaim Lipschitz.
Shaya Labin signed a contract to buy the property for $96 million in July 2022 from Fairstead, then the contract was reduced to $92.5 million. The entity made a $3 million deposit then filed for bankruptcy to hold on to the contract. The bankruptcy concluded in June 2023.

Simultaneously with the purchase, the new owner assumed $83 million in debt originally provided by MF1 Capital, an affiliate of Berkshire Residential Investments.

Aaron Jungreis of Rosewood Realty Group and Steven Vegh of Westwood Realty Associates were the brokers on the sale, representing both Fairstead and Herskovitz.

The purchase price is given as $86.75 million in the bankruptcy filing. The transfer on this deed is only $3.084 million. The financial accounting below was reported in the bankruptcy records.

Prior sales and revenue

Prior to this transaction, PincusCo has no record that the buyer Isaac Herskovitz had purchased any other properties and has no record it sold any properties over the past 24 months.
The seller Fairstead purchased two properties in two transactions for a total of $21.1 million and sold three properties in three transactions for a total of $38.7 million over the same time period. The former owners according to the Department of Housing Preservation and Development includes Luai Abdallah, head officer and Toni Harris, head officer. The business entities are Fairstead Management Llc and Dunbar Owner Llc. The 436,115-square-foot property generated revenue of $9 million or $21 per square foot, according to the most recent income and expense figures.

The property

The residential walkup building with 538 residential units in Harlem has 436,115 square feet of built space and 81,173 square feet of additional air rights for a total buildable of 517,104 square feet according to a PincusCo analysis of city data. The parcel has frontage of 775 feet and is 199 feet deep with a total lot size of 150,321 square feet. The lot is irregular. The zoning is R7-2 which allows for up to 3.44 times floor area ratio (FAR) for residential. The property is in the Individual Landmark. The property has a J-51 exemption that started in 2002 and expires in 2036. The city-designated market value for the property in 2022 is $30.9 million. The most recent loan totaled $86 million and was provided by Berkshire Residential Investments on February 23, 2021.

Violations and lawsuits

The property was involved in zero lawsuits and one bankruptcy over the past two years. The bankruptcy was filed on February 21, 2023, by David Goldwasser citing assets of $92.5 million. In addition, according to city public data, the property has received $4,375 in ECB penalties, 380 housing violations, $12,655 in OATH penalties, and seven housing litigations 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 this tax block, PincusCo has identified the owner of the one commercial property that spans that spans 436,115 square feet on the block.The identified owner is Fairstead.
There are no active new building construction projects on this tax block.

All properties are walkup.

The seller

The PincusCo database currently indicates that Fairstead owned at least 91 commercial properties with 5,138 residential units in New York City with 4,718,795 square feet and a city-determined market value of $451.4 million. (Market value is typically about 50% of actual value.) The portfolio has $615.1 million in debt, with top three lenders as NewPoint Real Estate Capital, Berkshire Residential Investments, and Greystone & Co. respectively. Within the portfolio, the bulk, or 83 percent of the 4,718,795 square feet of built space are elevator properties, with walkup properties next occupying 17 percent of the space. The bulk, or 46 percent of the built space, is in Manhattan, with Bronx next at 38 percent of the space.

The buyer

The PincusCo database currently indicates that Isaac Herskovitz owned at least 37 commercial properties with 1,570 residential units in New York City with 1,678,570 square feet and a city-determined market value of $93.5 million. (Market value is typically about 50% of actual value.) The portfolio has $234.6 million in debt, with top three lenders as Customers Bank, Popular Bank, and Spencer Savings Bank respectively. Within the portfolio, the bulk, or 59 percent of the 1,678,570 square feet of built space are elevator properties, with walkup properties next occupying 38 percent of the space. The bulk, or 90 percent of the built space, is in Bronx, with Brooklyn next at 8 percent of the space.

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