Peak Capital pays $24.3M for two residential walkup properties in Gramercy

Peak Capital Advisors through the entity 21st Owner LLC paid $24.3 million to Gennaro Vendome through the entity 227 J LLC for midblock 24-unit residential walkup building at 231 East 21st Street in Gramercy, Manhattan and midblock 24-unit residential walkup building at 233 East 21st Street in Gramercy, Manhattan.
Peak borrowed $16.5 million from Prime Finance Partners through the entity Prime Finance Short Duration Holding Company VIII to finance the acquisition.
The deal closed on May 3, 2022 and was recorded on May 23, 2022. The two properties have 36,012 square feet of built space and 363 square feet of additional air rights for a total buildable of 36,344 square feet according to PincusCo analysis of city data. The sale price per built square foot is $674 and the price per buildable square foot is $668 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 Gennaro Vendome was Gennaro Vendome. The signatory for Peak Capital Advisors was Alex Rabin. Alex Rabin is the co-founder of Peak Capital Advisors.

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 233 East 21st Street.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer Peak Capital Advisors purchased 10 properties in nine transactions for a total of $44.2 million and has no record it sold any properties over the past 24 months.
The seller Gennaro Vendome 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 Laura Esposito, head officer and Duncar Espinal, officer. The business entities are Provident Management Corp. and 227 J Llc. The two properties with a total of 36,012 square feet of built space generated revenue of $1.9 million per year or $52 per square foot. The sale price per square foot was $675.

The property

The 233 East 21st Street parcel has frontage of 46 feet and is 98 feet deep with a total lot size of 4,543 square feet. The zoning is R8B which allows for up to 4 times floor area ratio (FAR) for residential. The city-designated market value for the property in 2022 is $5.5 million.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the properties since September of 2020. In addition, according to city public data, the properties have received 21 housing violations, $3,590 in OATH penalties, and one housing litigation 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 Gramercy, the bulk, or 46 percent of the 16.4 million square feet of commercial built space are residential elevator buildings, with specialty buildings next occupying 19 percent of the space. In sales, Gramercy has had very little sales volume relative to other neighborhoods with $125.7 million in sales volume in the last two years. For development, Gramercy has 1.4 times the average amount of major developments relative to other neighborhoods and is the 17th highest in Manhattan. It had 1.3 million square feet of commercial and multi-family construction under development in the last two years, which represents 8 percent of the neighborhood’s built space.

The block

On the tax block of 233 East 21st Street, PincusCo has identified the owners of seven of the 14 commercial properties representing 240,458 square feet of the 313,173 square feet. The largest owner is PGIM Real Estate, followed by S.W. Management and then Slavko Bernic. There are no active new building construction projects on this tax block.

The majority, or 76 percent of the 686,983 square feet of built space are residential elevator buildings, with residential walkup buildings next occupying 11 percent of the space.

The buyer

The PincusCo database currently indicates that Peak Capital Advisors owned at least 11 commercial properties with 98,589 square feet and a city-determined market value of $28.2 million. (Market value is typically about 50% of actual value.) The portfolio has $30.1 million in debt, with top three lenders as Walker & Dunlop, Patriot Bank, and IberiaBank respectively. Within the portfolio, the bulk, or 87 percent of the 98,589 square feet of built space are residential walkup properties, with mixed-use properties next occupying 13 percent of the space. The bulk, or 57 percent of the built space, is in Brooklyn, with Manhattan next at 26 percent of the space.

Surrounding

Within a 400-foot radius of 233 East 21st Street, PincusCo identified eight commercial real estate items of interests occurred over the past 24 months.
Of those eight items, one was for major renovation including a certificate of occupancy change. It was an initial temporary certificate of occupancy issued on December 28, 2020 for the $351,000 renovation of 185,127-square-foot R-2 building with 202 residential units at 301 East 21st Street.
One of those eight items was a sale which Nina Ohebshalom bought the 141,355-square-foot, 77-unit office building (O6) on 220 East 23rd Street for $60 million from Kalimian family on November 27, 2020.
Of those eight items, six were loans above $5 million totaling $125.1 million. The most recent of the six was Slavko Bernic which borrowed $5.8 million from JPMorgan Chase secured by the 19,900-square-foot, 29-unit rental (D3) on 221 East 21st Street on February 28, 2022.

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