Meadow Partners pays $23M for four walkups in Chelsea

Meadow Partners through the entity Highline 22 Owner LLC paid $23 million to high net worth individuals through the entity Highline 22 LLC for the eight-unit residential walkup building (C7) at 203 10th Avenue in Chelsea, Manhattan, nine-unit residential walkup building (C7) at 205 10th Avenue in Chelsea, Manhattan, and 10-unit residential walkup building (C1) at 505 West 22nd Street in Chelsea, Manhattan.

Robert Morgenstern’s Canvas Property Group was an investor in the previous ownership and managed the properties, and will remain in the same position in the new structure, according to a person familiar with the deal.
The deal closed on September 7, 2023 and was recorded on September 12, 2023. The four properties have 22,870 square feet of built space and 14,238 square feet of additional air rights for a total buildable of 37,113 square feet according to a PincusCo analysis of city data. The sale price per built square foot is $1,005 and the price per buildable square foot is $619 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 the seller was Robert Morgenstern. The signatory for Meadow Partners was Jeffrey Kaplan. The contract date was September 1, 2023.

Because multiple properties have been transacted, some of the following sections will follow the property with the largest assessed value, which in this case, is the property on 203 10th Avenue.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer Meadow Partners purchased nine properties in eight transactions for a total of $610.1 million and sold seven properties in six transactions for a total of $153.8 million over the past 24 months.
The seller Morgenstern Capital 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 Jonathan Vayner, head officer and Robert Morgenstern, agent. The business entities are Canvas Property Group and Highline 22 Llc.

The property

The residential walkup building with 8 residential units in Chelsea has 22,870 square feet of built space and 14,238 square feet of additional air rights for a total buildable of 37,113 square feet according to a PincusCo analysis of city data. The parcel has frontage of 24 feet and is 74 feet deep with a total lot size of 1,835 square feet. The zoning is C6-2 which allows for up to 6 times floor area ratio (FAR) for commercial and up to 6.02 times FAR for residential. The city-designated market value for the property in 2022 is $8.1 million.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the properties for the past 24 months. In addition, according to city public data, the properties have received $13,475 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 block

On the tax block of 203 10th Avenue, PincusCo has identified the owners of four of the 15 commercial properties representing 654,569 square feet of the 816,174 square feet. The largest owner is Storagemart, followed by Related Companies and then Equity Residential.
On the tax block, there were two new building construction projects totaling 329,536 square feet. The largest is a 144-unit, 301,770 square-foot residential (R-2) building submitted by Related Companies and filed by Andrew Orchulli with plans filed October 31, 2017 and permitted July 3, 2018. The second largest is a 13-unit, 27,766 square-foot residential (R-2) building submitted by Christopher Jonns with plans filed March 8, 2017 and it has not been permitted yet.

The majority, or 66 percent of the 816,174 square feet of built space are elevator buildings, with industrial buildings next occupying 23 percent of the space.

The seller

The PincusCo database currently indicates that Canvas Property Group owned at least four commercial properties with 67 residential units in New York City with 70,071 square feet and a city-determined market value of $19.9 million. (Market value is typically about 50% of actual value.) The portfolio has $32.4 million in debt, borrowed from Greystone & Co.. Within the portfolio, all identified are walkup properties. The bulk, or 57 percent of the built space, is in Brooklyn, with Manhattan next at 43 percent of the space.
The PincusCo database currently indicates that Morgenstern Capital owned at least two commercial properties with 128 residential units in New York City with 131,930 square feet and a city-determined market value of $37.6 million. (Market value is typically about 50% of actual value.) The portfolio has $50.2 million in debt, borrowed from Square Mile Capital Management and Maverick Real Estate Partners. Within the portfolio, all identified are elevator properties. The bulk, or 80 percent of the built space, is in Manhattan, with Brooklyn next at 20 percent of the space.

The buyer

The PincusCo database currently indicates that Meadow Partners owned at least 31 commercial properties with 378 residential units in New York City with 1,933,439 square feet and a city-determined market value of $425.5 million. (Market value is typically about 50% of actual value.) The portfolio has $642.2 million in debt, with top three lenders as Fortress Investment Group, Deutsche Pfandbriefbank, and Apollo Global Management respectively. Within the portfolio, the bulk, or 62 percent of the 1,933,439 square feet of built space are office properties, with elevator properties next occupying 15 percent of the space. The bulk, or 67 percent of the built space, is in Manhattan, with Brooklyn next at 33 percent of the space.

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