UPDATED: MCR Hotels through the entity M4 Gramercy Park Hotel LLC as tenant signed a 99-year ground lease valued at $179.8 million with Solil Management through the entity Gramercy Park Partners, LLC as landlord, for the hotel building (H1) at 2 Lexington Avenue in Gramercy, Manhattan. The hotel is facing Gramercy Park and was formerly controlled by Aby Rosen’s RFR Holding, which lost control of the ground lease last year.
The Wall Street Journal, which reported on the lease after PincusCo first published this article, said the lease was valued at about $50 million.
This is a new ground lease. The city values the lease at $179.8 million for purposes of assessing taxes. The annual rent payments were not disclosed in the memorandum of lease. Solil Management owns and manages the properties amassed by the late investor Sol Goldman.
The deal closed on August 17, 2023 and was recorded on August 23, 2023. The property has 188,933 square feet of built space according to a PincusCo analysis of city data. The sale price per built square foot is $951 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 Solil Management was Jane H. Goldman. The signatory for MCR Hotels was Tyler Morse. This is a 99-year lease with August 17, 2023 as the lease start. Aby Rosen’s RFR Holding previously controlled the ground lease, but lost it in 2022.
Prior sales and revenue
Prior to this transaction, PincusCo has no record that the buyer MCR Hotels had purchased any other properties and has no record it sold any properties over the past 24 months.
The seller Solil Management had not purchased any other properties and had not sold any properties over the same time period. The former owners according to the Department of Housing Preservation and Development includes Jane Goldman, head officer and David Malanga, agent. The business entity is Gramercy Park Partners.
The hotel building in Gramercy has 188,933 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 131 feet and is 84 feet deep with a total lot size of 10,751 square feet. The lot is irregular. The zoning is R9A which allows for up to 7.52 times floor area ratio (FAR) for residential with inclusionary housing. The city-designated market value for the property in 2022 is $81.1 million.
There are no active new building construction projects or major alteration projects with initial costs more than $1 million on this tax lot.
In Gramercy, The bulk, or 31 percent of the 11.3 million square feet of commercial built space are elevator buildings, with specialty buildings next occupying 24 percent of the space. In sales, Gramercy has had very little sales volume relative to other neighborhoods with $266 million in sales volume in the last two years. For development, Gramercy has 1.8 times the average amount of major developments relative to other neighborhoods and is the 17th 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 16 percent of the neighborhood’s built space.
On this tax block, PincusCo has identified the owners of four of the eight commercial properties representing 304,965 square feet of the 342,205 square feet. The largest owner is Parkoff Organization and then Feil Organization.
There are no active new building construction projects on this tax block.
The majority, or 55 percent of the 342,205 square feet of built space are hotel buildings, with elevator buildings next occupying 33 percent of the space.
The PincusCo database currently indicates that Solil Management owned at least 261 commercial properties with 4,326 residential units in New York City with 9,055,466 square feet and a city-determined market value of $2.6 billion. (Market value is typically about 50% of actual value.) The portfolio has $18 million in debt, borrowed from State Farm Realty Mortgage. Within the portfolio, the bulk, or 36 percent of the 9,055,466 square feet of built space are elevator properties, with office properties next occupying 23 percent of the space. The bulk, or 70 percent of the built space, is in Manhattan, with Queens next at 15 percent of the space.
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