Mequity, Flatiron Equities pay $23.8M in Garment District for storage conversion

152 West 36th Street self storage rendering (Credit - Joseph M. Neitzel architect via DOB)

152 West 36th Street self storage rendering (Credit - Joseph M. Neitzel architect via DOB)

Georgia-based Mequity Companies and Flatiron Equities through the entity 152 W 36 Owner LLC paid $23.8 million to Falcon Properties through the entity Hadji Baba Properties Corp. for the office building (O6) at 152 West 36th Street in Garment District, Manhattan. The expected use is conversion and enlargement to a self storage building to be operated by Manhattan Mini Storage, as The Real Deal reported.
The deal closed on September 9, 2024 and was recorded on September 24, 2024. The property has 51,853 square feet of built space and 7,406 square feet of additional air rights for a total buildable of 59,250 square feet according to a PincusCo analysis of city data. The sale price per built square foot is $458 and the price per buildable square foot is $401 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 Falcon Properties was David Zaga. The signatory for Mequity Companies and Flatiron Equities was William H. Marsh Jr.. The contract date was July 26, 2023. Mequity is a self storage company. The Real Deal reported the buyers plan to plans to convert the existing eight-story building into a 16-story storage building operated by Manhattan Mini Storage.

Prior sales and revenue

Prior to this transaction, PincusCo has no record that the buyer Mequity Companies had purchased any other properties and has no record it sold any properties over the past 24 months.
The seller Falcon Properties had not purchased any other properties and sold two properties in two transactions for a total of $6.5 million over the same time period. The 51,853-square-foot property generated revenue of $1.6 million or $31 per square foot, according to the most recent income and expense figures.

152 West 36th Street (Credit - Cyclomedia)
152 West 36th Street (Credit – Cyclomedia)

The property

The office building in Garment District has 51,853 square feet of built space and 7,406 square feet of additional air rights for a total buildable of 59,250 square feet according to a PincusCo analysis of city data. The parcel has frontage of 60 feet and is 98 feet deep with a total lot size of 5,925 square feet. The zoning is M1-6 which allows for up to 10 times floor area ratio (FAR) for manufacturing The city-designated market value for the property in 2022 is $7.1 million. The most recent loan totaled $18 million and was provided by First Republic Bank on September 17, 2021.

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 $1,740 in OATH penalties in the last year.

Development

On the lot, there is one active major alteration construction project, M01003551, for an 82,397 square-foot storage building. The project was submitted by Robert Holly with plans filed March 1, 2024 and it has not been permitted yet.

The neighborhood

In Garment District, The majority, or 69 percent of the 52.3 million square feet of commercial built space are office buildings, with hotel buildings next occupying 13 percent of the space. In sales, Garment District has 2 times the average sales volume among other neighborhoods with $532 million in sales volume in the last two years and is the 16th highest in Manhattan. For development, Garment District is the 5th most active neighborhood among other neighborhoods. It had 7.1 million square feet of commercial and multi-family construction under development in the last two years, which represents 14 percent of the neighborhood’s built space. There were four 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 nine of the 13 commercial properties representing 1,494,863 square feet of the 1,700,783 square feet. The largest owner is Empire State Realty Trust, followed by Sol Goldman Investments and then Adams & Company.
There are no active new building construction projects on this tax block.

The majority, or 98 percent of the 1.7 million square feet of built space are office buildings, with retail buildings next occupying 2 percent of the space.

The seller

The PincusCo database currently indicates that Falcon Properties owned at least two commercial properties in New York City with 209,372 square feet and a city-determined market value of $39.2 million. (Market value is typically about 50% of actual value.) The portfolio has $35.5 million in debt, borrowed from First Republic Bank and Signature Bank. Within the portfolio, all identified are office properties. They are all located in Manhattan.

The buyer

The PincusCo database currently indicates that Mequity Companies owned at least one commercial property in New York City with 61,957 square feet and a city-determined market value of $15.6 million. (Market value is typically about 50% of actual value.) The portfolio has $35.1 million in debt, borrowed from Cerberus Capital Management. The portfolio consists of at least a single industrial property. It is located in Manhattan.
The PincusCo database currently indicates that Flatiron Equities owned at least one commercial property in New York City with 51,853 square feet and a city-determined market value of $7.1 million. (Market value is typically about 50% of actual value.) The portfolio consists of at least a single office property. It is located in Manhattan.

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