Penn South Capital acquires 10-unit Alphabet City walkup in $5.2M deal

Penn South Capital through the entity Grogu Holdings LLC acquired the 10-unit walkup in Alphabet City at 6 Avenue B that had a total transaction cost of $5.2 million. The sale occurred in two parts, the first with a value of $4.2 million in which FIA Capital Partners acquired an interest from the Bertha Zawin estate, and the second, in which Penn South Capital acquired the deed through a $1.05 million transaction from FIA Capital.
The distinction between the entity level transfer and the deed transfer was not immediately clear.
The deal closed on January 27, 2023 and was recorded on February 6, 2023. The property has 7,995 square feet of built space and 2,946 square feet of additional air rights for a total buildable of 10,950 square feet according to PincusCo analysis of city data. The sale price per built square foot is $656 and the price per buildable square foot is $479 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 FIA Capital Partners was David Goldwasser. The signatory for Penn South Capital was Parag Sawhney. This building was part of the estate of Arthur and Abraham Blasof as the local blog EV Grieve reported, and the estate of Bertha Zawin.  Arthur Blasof was identified in HPD records as the owner.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer Penn South Capital purchased nine properties in eight transactions for a total of $58 million and sold two properties in two transactions for a total of $50.2 million over the past 24 months.
The seller FIA Capital Partners had not purchased any other properties and sold seven properties in three transactions for a total of $9.9 million over the same time period. The former owners according to the Department of Housing Preservation and Development includes Arthur Blasof, head officer and Bertha Gottenberg, officer. The business entity is 6 Ave B Inc.

The property

The 6 Avenue B parcel has frontage of 24 feet and is 79 feet deep with a total lot size of 1,819 square feet. The lot is irregular. The zoning is R8A which allows for up to 6.02 times floor area ratio (FAR) for residential with inclusionary housing. The city-designated market value for the property in 2022 is $2.6 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 five DOB violations, $22,530 in ECB penalties, and $22,580 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 two of the 15 commercial properties representing 28,134 square feet of the 352,950 square feet. The two identified owners are Kushner Companies and Atkins & Breskin.
On the tax block, there was one new building construction project filed totaling 68,531 square feet. It is a 67-unit, 68,531-square-foot R-2 building developed by Daniel Hirsch with plans filed December 23, 2021 and permitted May 2, 2022.

The majority, or 55 percent of the 210,130 square feet of built space are elevator buildings, with walkup buildings next occupying 35 percent of the space.

The buyer

The PincusCo database currently indicates that Penn South Capital owned at least 11 commercial properties in New York City with 70,368 square feet and a city-determined market value of $35.3 million. (Market value is typically about 50% of actual value.) The portfolio has $82.3 million in debt, with top three lenders as Shelter Growth Capital Partners, Midcap Financial, and KeyBank respectively. Within the portfolio, the bulk, or 60 percent of the 70,368 square feet of built space are walkup properties, with retail properties next occupying 13 percent of the space. The bulk, or 94 percent of the built space, is in Manhattan, with Brooklyn next at 6 percent of the space.

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