O’Brien-Staley Partners buys $15M in notes secured by three Dean Galasso rental buildings with 32 units

A fund affiliated with the Minnesota-based investment firm O’Brien-Staley Partners bought $14.93 million in original principal notes secured by three of Dean Galasso’s rental buildings in Manhattan in three separate transactions. The seller was Investors Bank.

In the first, O’Brien-Staley Partners through the entity OSK XII, LLC bought a note with an original principal of $5 million from Investors Bank secured by Dean Galasso’s 10-unit residential walkup building (C7) at 43 Essex Street in Lower East Side, Manhattan.
The deal closed on September 8, 2022 and was recorded on October 13, 2022. The prior lender was Investors Bank which held debt that had an original loan amount of $5 million. The property has 10,512 square feet of built space and 2,669 square feet of additional air rights for a total buildable of 13,171 square feet according to PincusCo analysis of city data.
The owner bought the property on December 19, 2014, for $6.9 million. Dean Galasso in 2017 was accused of mortgage fraud in obtaining the Investors Bank loan at the building by the New York State Attorney General at the time, Eric Schneiderman, though there have been no follow-up articles reporting on whether the charges were dropped or if the case was pursued.

In the second transaction, O’Brien-Staley Partners through the entity OSK XII, LLC bought a note with an original principal of $6.6 million from Investors Bank secured by Dean Galasso’s 14-unit residential elevator building (D1) at 53 Pitt St in Lower East Side, Manhattan. The deal closed on September 8, 2022 and was recorded on October 13, 2022. The prior lender was Investors Bank which held debt that had an original loan amount of $6.6 million. The property has 14,938 square feet of built space according to PincusCo analysis of city data. The owner bought the property on November 15, 2011, for $4.1 million.

In the third, O’Brien-Staley Partners through the entity OSK XII, LLC bought a note with an original principal of $3.3 million from Investors Bank secured by Dean Galasso’s eight-unit residential walkup building (C7) at 92 East Broadway in Chinatown, Manhattan. The deal closed on September 8, 2022 and was recorded on October 13, 2022. The prior lender was Investors Bank which held debt that had an original loan amount of $3.3 million.The property has 8,495 square feet of built space according to PincusCo analysis of city data. The owner bought the property on February 20, 2014, for $3.8 million.

Prior sales and revenue

The owners according to the Department of Housing Preservation and Development includes Dean Galasso, head officer and Paul Galasso, officer. The business entity is 43 Essex Llc. The 10,512-square-foot property generated revenue of $562,403 or $54 per square foot, according to the most recent income and expense figures.

The property

The 43 Essex Street parcel has frontage of 24 feet and is 87 feet deep with a total lot size of 2,188 square feet. The lot is irregular. 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 $2.4 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 $3,810 in ECB penalties and $4,910 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 $5 million on this tax lot.

The block

On this tax block, PincusCo has identified the owners of 10 of the 36 commercial properties representing 98,746 square feet of the 266,726 square feet. The largest owner is Xiu Hui Lu, followed by Mendel Guttman and then Viking Management.
On the tax block, there were two new building construction projects totaling 24,400 square feet. The largest is a 17-unit, 17,466-square-foot R-2 building developed by Chen Wu with plans filed February 7, 2013 and it has not been permitted yet.The second largest is a two-unit, 6,934-square-foot R-3 building developed by Jennie Lai with plans filed June 24, 2015 and permitted February 21, 2020.

The majority, or 59 percent of the 257,502 square feet of built space are walkup buildings, with mixed-use buildings next occupying 24 percent of the space.

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