Optimum Properties pays $16.2M for 603 Fifth Avenue, already owns 605 Fifth

Optimum Properties through the entity 603 Fifth Property Owner, LLC paid $16.2 million to Andrew H. Rosenthal through the entity 603 Fifth Avenue LLC for retail building (K4) at 603 Fifth Avenue in Midtown East, Manhattan. Optimum Properties already owns 605 Fifth Avenue, which it acquired in 1985.
The deal closed on March 17, 2023 and was recorded on March 22, 2023. The property has 9,446 square feet of built space and 13,050 square feet of additional air rights for a total buildable of 22,500 square feet according to PincusCo analysis of city data. The sale price per built square foot is $1,720 and the price per buildable square foot is $722 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 Andrew H. Rosenthal was William A. Shmerler. The signatory for Optimum Properties was Ness Cohen.  Jack Cohen is CFO of Optimum Properties, according to a LinkedIn page.

Prior sales and revenue

Prior to this transaction, PincusCo has no record that the buyer Optimum Properties had purchased any other properties and has no record it sold any properties over the past 24 months.
The seller Andrew H. Rosenthal had not purchased any other properties and had not sold any properties over the same time period. The 9,446-square-foot property generated revenue of $2 million or $209 per square foot, according to the most recent income and expense figures.

The property

The 603 5th Avenue parcel has frontage of 22 feet and is 100 feet deep with a total lot size of 2,250 square feet. The zoning is C5-3 which allows for up to 15 times floor area ratio (FAR) for commercial and up to 10 times FAR for residential with inclusionary housing. The city-designated market value for the property in 2022 is $14.7 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 not received any significant violations 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 neighborhood

In Midtown East, the majority, or 81 percent of the 61.6 million square feet of commercial built space are office buildings, with hotel buildings next occupying 7 percent of the space. In sales, Midtown East has the 2nd highest sale turnover among other neighborhoods in the city with $3.6 billion in sales volume in the last two years. For development, Midtown East is the 2nd most active neighborhood among other neighborhoods. It had 15.4 million square feet of commercial and multi-family construction under development in the last two years, which represents 25 percent of the neighborhood’s built space. There was one pre-foreclosure suit filed among other mixed-use buildings in the past 12 months.

The block

On this tax block, PincusCo has identified the owners of eight of the 22 commercial properties representing 1,500,542 square feet of the 2,669,978 square feet. The largest owner is Motcomb Estates, followed by Sol Goldman Investments and then Silk & Halpern Realty Associates.
On the tax block, there was one new building construction project filed totaling 285,606 square feet. It is a 285,606-square-foot office (B) building developed by JPMorgan Chase with plans filed June 30, 2022 and it has not been permitted yet.

The majority, or 93 percent of the 2.5 million square feet of built space are office buildings, with retail buildings next occupying 5 percent of the space.

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