Owemanco gets Chinatown retail in $10.2M bankruptcy, former owner has $11.5M option to buy

Owemanco Mortgage Holding Corporation through the entity Owemanco’S Broadway Run LP acquired the mixed-use retail building (K4) at 42 East Broadway in Chinatown, Manhattan through a $10.2 million bankruptcy from the former owner, Chen Lieh Tang through the entity Q.Y. Tangs Hwa Yuan Inc. The expected use is cash flowing.
The deal closed on November 15, 2024 and was recorded on December 4, 2024. The property has 11,475 square feet of built space and 486 square feet of additional air rights for a total buildable of 11,954 square feet according to a PincusCo analysis of city data. The sale price per built square foot is $888 and the price per buildable square foot is $853 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 Chen Lieh Tang was Chen Lieh Tang. The signatory for Owemanco Mortgage Holding Corporation was Sohail Zayona. The contract date was November 14, 2024.
PincusCo previously reported that restaurateur and property owner Tang filed the bankruptcy petition, 23-11730-dsj, to halt the foreclosure sale of his four-story retail property, scheduled for November 1, 2023 with a total judgment of $11.99 million.

The debtor Q.Y. Tang’s Hwa Yuan Inc. according to petitioner and owner Chen Lieh Tang, bought the property in 1979 and Tang runs a restaurant and karaoke bar in the former Bank of China building, but both were harmed by Covid, according to the bankruptcy petition filed in Manhattan October 30, 2023.

The goal of the bankruptcy is to refinance the loan, and in order to do that, Tang and his wife may sell or use as collateral one or both of their other two assets, 236 East 53rd Street, estimated to be worth about $12 million and 98 Eighth Avenue, estimated to be worth $7 million.

The resolve the bankruptcy, Tang gave the building to Owemanco, and Owemanco signed a lease as new landlord with Tang as new tenant, for the restaurant space. Now Tang has 12 months to exercise a purchase option to buy back the building for $11.5 million. He can pay $200,000 to extend the option another six months. In addition, Tang owes Owemanco $3.5 million because of a “guaranty claim”, which will be reduced to $2.5 million if he buys the building within a year (or 18 months with the extension). The agreement envisions that Tang will sell his interests in one or all of the three additional properties he owns: 236 East 53rd Street, 98 8th Avenue and apartment 22B in 200 Chambers Street, in order to buy back the property and pay off the guaranty claim.

Prior sales and revenue

Prior to this transaction, PincusCo has no record that the buyer Owemanco Mortgage Holding Corporation had purchased any other properties and has no record it sold any properties over the past 24 months.
The seller Chen Lieh Tang had not purchased any other properties and had not sold any properties over the same time period.

The property

The mixed-use building in Chinatown has 11,475 square feet of built space and 486 square feet of additional air rights for a total buildable of 11,954 square feet according to a PincusCo analysis of city data. The parcel has frontage of 50 feet and is 69 feet deep with a total lot size of 3,475 square feet. The lot is irregular. The city-designated market value for the property in 2022 is $4.1 million.

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 $9,000 in OATH penalties in the last year.

Development

For the tax lot building, it received its initial certificate of occupancy on February 4, 2019. On the lot, there is one active major alteration construction project, 122546888, for a 11,845 square-foot B building. The project was submitted by Chen Lieh Tang with plans filed October 13, 2015 and permitted February 7, 2017.

The neighborhood

In Chinatown, The bulk, or 36 percent of the 8.4 million square feet of commercial built space are walkup buildings, with mixed-use buildings next occupying 17 percent of the space. In sales, Chinatown has had very little sales volume relative to other neighborhoods with $119.8 million in sales volume in the last two years. For development, Chinatown has had very little major development activity relative to other neighborhoods.It had 433,761 square feet of commercial and multi-family construction under development in the last two years, which represents 5 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of five of the 48 commercial properties representing 61,614 square feet of the 434,757 square feet. The largest owner is Raber Enterprises, followed by Lin’S Temple Corporation and then David Cheng.
There are no active new building construction projects on this tax block.

The majority, or 41 percent of the 434,757 square feet of built space are mixed-use buildings, with walkup buildings next occupying 24 percent of the space.

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