L+M, Taconic sign 99-year ground lease valued at $22M for development site in Inwood

L+M Development Partners and Taconic Partners through the entity Inwood Lot 9 Development Associates LLC as tenant signed a ground lease valued at $22.2 million with AAG Management through the entity West 207 Grocery Owners, LLC as landlord for the development property at 407 West 206th Street in Inwood, Manhattan. A ground lease between AAG and Taconic, signed in 2013 and valued at $24.63 million, was simultaneously terminated.
L+M and Taconic filed plans in 2021 for a 470-unit project at the site and a 194-unit project also on this tax lot.
The new ground lease deal closed on June 29, 2022 and was recorded on July 14, 2022. The property has 34,000 square feet of built space and 326,722 square feet of additional air rights for a total buildable of 360,892 square feet according to PincusCo analysis of city data. The sale price per built square foot is $652 and the price per buildable square foot is $61 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 landlord AAG bought the property on March 19, 2013, for $9.5 million.
This is a 99-year ground lease starting on June 29, 2022. Arnold Gumowitz is the president of AAG Management, the landlord.  David Dishy is the head of LMXD, a part of L+M Development Partners. Andrew Zlotnick, general counsel at Taconic, was a signatory for the firm on related property documents.

Prior sales and revenue

The 34,000-square-foot property generated revenue of $1.3 million or $39 per square foot, according to the most recent income and expense figures.

The property

The 407 West 206th Street parcel has frontage of 300 feet and is 199 feet deep with a total lot size of 59,949 square feet. The zoning is R8A which allows for up to 6.02 times floor area ratio (FAR) for residential with inclusionary housing. The city-designated market value for the property in 2022 is $6.5 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 two DOB violations in the last year.

Development

On these lots, there is one active new building construction project for a 470-unit, 536,269-square-foot R-2 building. The project was developed by Taconic with plans filed October 21, 2021 and it has not been permitted yet.

The neighborhood

In Inwood, the bulk, or 40 percent of the 17.2 million square feet of commercial built space are residential elevator buildings, with residential walkup buildings next occupying 38 percent of the space. In sales, Inwood has near average sales volume among other neighborhoods with $352.6 million in sales volume in the last two years and is the 28th highest in Manhattan. For development, Inwood has 1.8 times the average amount of major developments relative to other neighborhoods and is the 16th highest in Manhattan. It had 1.9 million square feet of commercial and multi-family construction under development in the last two years, which represents 11 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of one of the six commercial properties representing zero square feet of the 75,078 square feet. The identified owner is L+M Development Partners.
There are two active new building construction projects totaling 755,342 square feet. One is a 194-unit, 219,073-square-foot R-2 building developed by David Dishy with plans filed October 14, 2021 and it has not been permitted yet. The second largest is a 470-unit, 536,269-square-foot R-2 building developed by Taconic with plans filed October 21, 2021 and it has not been permitted yet.

The majority, or 75 percent of the 75,078 square feet of built space are retail buildings, with residential walkup buildings next occupying 25 percent of the space.

Surrounding

Within a 400-foot radius of 407 West 206th Street, PincusCo identified five commercial real estate items of interests occurred over the past 24 months.
Of those five items, one was in new building development. It was a new building permit application filed on October 14, 2021 for a 175,966-square-foot R-2 building with 194 residential units at 405 West 206th Street.
Of those five items, two were sales above $5 million totaling $32.2 million. The most recent of the two was Jay Group which bought the 2,100-square-foot, one-unit retail building (G3) on 401 West 207th Street for $25 million from Speedway on March 31, 2022.
Of those five items, two were loans above $5 million totaling $11 million. The most recent of the two was Robert Miller which borrowed $5.2 million from JPMorgan Chase secured by the 77,967-square-foot, 72-unit rental (D3) on 425 West 205th Street on June 30, 2021.

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