Kahen Properties pays $11.2M for 3rd piece of likely dev site in Lenox Hill

Kahen Properties through the entity Third South Holdings LLC paid $11.2 million to Jans Investment Company through the entity 1020 Third Avenue Associates, L.P. for the 16-unit residential walkup building (C7) at 1020 3rd Avenue in Lenox Hill, Manhattan. PincusCo reported yesterday on Kahen buying two adjacent properties on the block, and noted Kahen already controlled this one, but did not report the price, seller or date.
The deal closed on July 12, 2022 and was recorded on July 21, 2022. The property has 9,190 square feet of built space and 17,062 square feet of additional air rights for a total buildable of 26,250 square feet according to PincusCo analysis of city data. The sale price per built square foot is $1,218 and the price per buildable square foot is $426 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 Jans Investment Company was Anthony Felzen. The signatory for Kahen Properties was Majid Kahen. Anthony Felzen invests in real estate and is involved in Israel and Jewish philanthropy.  The property was owned by the Felzen family entity and by the family of Robert S. Levin, which owned a stake in the building since before 1982.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer Kahen Properties purchased two properties in two transactions for a total of $22.5 million and has no record it sold any properties over the past 24 months.
The seller Jans Investment Company had not purchased any other properties and sold one properties in one transactions for a total of $12.8 million over the same time period. The former owners according to the Department of Housing Preservation and Development includes Tony Felzen, head officer and Nakia Townsend, site manager. The business entities are Rudd Realty Management Corp and 1020 Third Ave Associates. The 9,190-square-foot property generated revenue of $746,429 or $81 per square foot, according to the most recent income and expense figures.

The property

The 1020 3rd Avenue parcel has frontage of 25 feet and is 105 feet deep with a total lot size of 2,625 square feet. The zoning is C1-9 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 $3.5 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 $100 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 block

On this tax block, PincusCo has identified the owners of 12 of the 47 commercial properties representing 36,110 square feet of the 463,974 square feet. The largest owner is Arris Properties Group, followed by Vrahos LLC and then Icon Realty Management. There is one active new building construction project totaling 9,899 square feet. It is a seven-unit, 9,899-square-foot R-2 building developed by Majid Kahen with plans filed March 4, 2022 and it has not been permitted yet.

The majority, or 56 percent of the 404,431 square feet of built space are office buildings, with walkup buildings next occupying 19 percent of the space.

The buyer

The PincusCo database currently indicates that Kahen Properties owned at least nine commercial properties in New York City with 242,314 square feet and a city-determined market value of $42.4 million. (Market value is typically about 50% of actual value.) The portfolio has $31.3 million in debt, with top three lenders as Santander Bank, Signature Bank, and PIMCO respectively. Within the portfolio, the bulk, or 56 percent of the 242,314 square feet of built space are elevator properties, with walkup properties next occupying 33 percent of the space. The bulk, or 42 percent of the built space, is in Queens, with Manhattan next at 35 percent of the space.

Direct link to Acris document. link