Madison Realty Capital pays $7.2M to JDS Development for retail unit in Chelsea

Madison Realty Capital, which provided $60 million in funding for the building, has purchased a retail condo at 514 West 24th Street, known as the Fitzroy, in Chelsea, Manhattan, from JDS Development Group for $7.2 million.

The deal closed on March 21, 2022 and was recorded on March 30, 2022.

Michael Stern, founder and CEO of JDS signed for the company through the entity 514 West 24th Owner LLC. Brian Shatz, co-founder of Madison Realty Capital signed through the entity Fitzroy Retail Owner LLC.

In July of 2021, JDS signed a severance agreement with Madison Realty Capital which split the mortgage into two liens which were previously consolidated totaling $60 million.

The condo unit has 11,121 square feet of built space according to PincusCo analysis of city data. The sale price per built square foot is $650 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 city-designated market value for the property in 2022 is $4 million.

Development

For the tax lot building, it received its initial certificate of occupancy on August 25, 2020. There are no active new building construction projects or major alteration projects with initial costs more than $5 million on this tax lot. On the tax lot, there was a condominium project filed with the address 514 West 24th Street and the name 514 West 24th Street Condominium on March 25, 2015. The principals of the sponsor, 514 WEST 24TH OWNER LLC, were Nissim Ben-Nun, Michael Stern, and Nicholas Werner.

The neighborhood

In Chelsea, the bulk, or 35 percent of the 62.6 million square feet of commercial built space are residential elevator buildings, with office buildings next occupying 30 percent of the space. In sales, Chelsea has the 2nd highest sale turnover among other neighborhoods in the city with $2.3 billion in sales volume in the last two years. For development, Chelsea has 1.4 times the average amount of major developments relative to other neighborhoods and is the 16th highest in Manhattan. It had 1.3 million square feet of commercial and multi-family construction under development in the last two years, which represents 2 percent of the neighborhood’s built space. There was one pre-foreclosure suit filed among other retail buildings in the past 12 months.

The block

There are two active new building construction projects totaling 118,883 square feet. The largest is a 11-unit, 72,090-square-foot R-2 building developed by John Jacobson with plans filed November 9, 2013 and it has not been permitted yet. The second largest is a 14-unit, 46,793-square-foot R-2 building developed by Nicholas Werner with plans filed August 29, 2014 and permitted November 14, 2016.

The majority, or 81 percent of the 369,098 square feet of built space are residential elevator buildings, with mixed-use buildings next occupying 7 percent of the space.

Surrounding

Within a 400-foot radius of 514 West 24th Street, PincusCo identified nine commercial real estate items of interests occurred over the past 24 months.
Of those nine items, one was for major renovation including a certificate of occupancy change. It was a permit issued on March 24, 2021 for the $910,600 renovation of 80,266-square-foot office (B) building with no residential units at 530 West 25th Street.
Of those nine items, five were sales above $5 million totaling $253 million.
Of those nine items, three were loans above $5 million totaling $1.8 billion. The most recent of the three was StorageMart which borrowed $1.7 billion from Barclays secured by the 257,400-square-foot, one-unit industrial (E7) on 524 West 23rd Street and 16 other properties on January 6, 2022.

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