Jackson Group acquires Lenox Hill retail through ground lease with Churchill

Jackson Group through the entity 809 Madison Retail LLC as tenant acquired a leasehold from Churchill Real Estate Holdings through the entity Churchill 809 Madison LLC as landlord for retail at the base of the 33-unit residential elevator building (D6) at 809 Madison Avenue, also known as 30 East 68th Street in Lenox Hill, Manhattan. The expected use is cash flowing.
The deal closed on May 15, 2024 and was recorded on July 26, 2024. The lease is for 99 years.
The landlord bought the property on August 14, 2019, for $56.8 million. The signatory for Churchill Real Estate Holdings was Sorabh Maheshwari. The signatory for Jackson Group was Gabriel Chehebar. This is a lease for an unspecified portion of the retail property.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the lessee Jackson Group purchased six properties in five transactions for a total of $49.4 million and sold five properties in five transactions for a total of $29.7 million over the past 24 months.
The lessor Churchill Real Estate Holdings had not purchased any other properties and sold four properties in four transactions for a total of $48.8 million over the same time period. The owners according to the Department of Housing Preservation and Development includes Sorabh Maheshwari, head officer and Angel Diaz, site manager. The business entities are Livingston Management Services and Churchill 809 Madison Llc. The 41,371-square-foot property generated revenue of $3.5 million or $84 per square foot, according to the most recent income and expense figures.

The property

The residential elevator building with 33 residential units in Lenox Hill has 41,371 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 40 feet and is 95 feet deep with a total lot size of 3,839 square feet. The zoning is C5-1 which allows for up to 4 times floor area ratio (FAR) for commercial and up to 10 times FAR for residential with inclusionary housing. The property is in the Upper East Side Historic District. The city-designated market value for the property in 2022 is $22.1 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 received $800 in OATH penalties in the last year.

Development

For the tax lot building, it received its initial certificate of occupancy on October 11, 2012. On the lot, there is one active major alteration construction project, M00998664, for a 11-unit, 37,888 square-foot R-2 building. The project was submitted by Brandon Collier with plans filed February 22, 2024 and it has not been permitted yet.

The block

On this tax block, PincusCo has identified the owners of 11 of the 30 commercial properties representing 183,552 square feet of the 371,929 square feet. The largest owner is Aaron Jungreis, followed by Aryeh Realty and then Bernard Friedman.
There are no active new building construction projects on this tax block.

The majority, or 45 percent of the 371,929 square feet of built space are elevator buildings, with office buildings next occupying 17 percent of the space.

The seller

The PincusCo database currently indicates that Churchill Real Estate Holdings owned at least eight commercial properties with 159 residential units in New York City with 186,261 square feet and a city-determined market value of $73.1 million. (Market value is typically about 50% of actual value.) The portfolio has $144.9 million in debt, with top three lenders as Square Mile Capital Management, Keysite Capital Partners, and Silver Point Capital respectively. Within the portfolio, the bulk, or 57 percent of the 186,261 square feet of built space are elevator properties, with walkup properties next occupying 27 percent of the space. They are all located in Manhattan.

The buyer

The PincusCo database currently indicates that Jackson Group owned at least eight commercial properties in New York City with 207,835 square feet and a city-determined market value of $45.4 million. (Market value is typically about 50% of actual value.) The portfolio has $27.8 million in debt, borrowed from Signature Bank and Safra National Bank. Within the portfolio, the bulk, or 51 percent of the 207,835 square feet of built space are retail properties, with mixed-use properties next occupying 49 percent of the space. The bulk, or 58 percent of the built space, is in Brooklyn, with Queens next at 38 percent of the space.

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