Leonid Vayner pays $12.85M to Wharton Properties for office in Sheepshead Bay

Leonid Vayner through the entity Kings Highway 1602 Realty LLC paid $12.85 million to Jeff Sutton’s Wharton Properties through the entity 1602 Kings Highway LLC for the office building (O5) at 1602 Kings Highway in Sheepshead Bay, Brooklyn. The expected use is cash flowing.
The deal closed on October 8, 2024 and was recorded on October 24, 2024. The property has 32,838 square feet of built space and 3,956 square feet of additional air rights for a total buildable of 36,800 square feet according to a PincusCo analysis of city data. The sale price per built square foot is $391 and the price per buildable square foot is $349 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.)
Jeff Sutton bought the property on January 31, 2020, for $11.75 million. The signatory for Wharton Properties was Jeff Sutton. The signatory for Leonid Vayner was Leonid Vayner. The contract date was March 7, 2024. PincusCo reported on the Wharton Properties purchase in 2020. This is the most expensive property Leonid Vayner has purchased since at least 2020.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer Leonid Vayner purchased two properties in two transactions for a total of $4.6 million and has no record it sold any properties over the past 24 months.
The seller Wharton Properties purchased six properties in four transactions for a total of $44.9 million and sold 19 properties in 14 transactions for a total of $1.9 billion over the same time period.

The property

The office building in Sheepshead Bay has 32,838 square feet of built space and 3,956 square feet of additional air rights for a total buildable of 36,800 square feet according to a PincusCo analysis of city data. The parcel has frontage of 49 feet and is 112 feet deep with a total lot size of 9,200 square feet. The lot is irregular. The zoning is C4-4A which allows for up to 4 times floor area ratio (FAR) for commercial and up to 4 times FAR for residential with inclusionary housing. The city-designated market value for the property in 2022 is $5.7 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 one DOB violation and $350 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 $1 million on this tax lot.

The neighborhood

In Sheepshead Bay, The bulk, or 43 percent of the 26.6 million square feet of commercial built space are elevator buildings, with specialty buildings next occupying 17 percent of the space. In sales, Sheepshead Bay has 2.1 times the average sales volume among other neighborhoods with $543.4 million in sales volume in the last two years and is the 11th highest in Brooklyn. For development, Sheepshead Bay has had very little major development activity relative to other neighborhoods.It had 828,932 square feet of commercial and multi-family construction under development in the last two years, which represents 3 percent of the neighborhood’s built space. There was one pre-foreclosure suit filed among other office buildings in the past 12 months.

The block

On this tax block, PincusCo has identified the owners of six of the 14 commercial properties representing 103,298 square feet of the 233,945 square feet. The largest owner is Wharton Properties, followed by Joseph Lazarus and then Interborough Developmental & Consultation Center.
On the tax block, there was one new building construction project filed totaling 67,989 square feet. It is a 67,989 square-foot mercantile (M) building submitted by Walter Schik with plans filed March 13, 2014 and permitted March 10, 2017.

The majority, or 58 percent of the 233,945 square feet of built space are office buildings, with walkup buildings next occupying 22 percent of the space.

The seller

The PincusCo database currently indicates that Wharton Properties owned at least 87 commercial properties with 252 residential units in New York City with 3,376,939 square feet and a city-determined market value of $1.6 billion. (Market value is typically about 50% of actual value.) The portfolio has $263.8 million in debt, with top three lenders as Valley National Bank, Bank of China, and Provident Bank respectively. Within the portfolio, the bulk, or 67 percent of the 3,376,939 square feet of built space are office properties, with retail properties next occupying 19 percent of the space. The bulk, or 85 percent of the built space, is in Manhattan, with Brooklyn next at 11 percent of the space.

The buyer

The PincusCo database currently indicates that Leonid Vayner owned at least five commercial properties in New York City with 40,081 square feet and a city-determined market value of $4.8 million. (Market value is typically about 50% of actual value.) The portfolio has $5.2 million in debt, borrowed from Webster Bank. Within the portfolio, the bulk, or 53 percent of the 40,081 square feet of built space are mixed-use properties, with office properties next occupying 39 percent of the space. The bulk, or 95 percent of the built space, is in Brooklyn, with Manhattan next at 5 percent of the space.

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