Penn South Capital pays $4.3M to Daniel Gutierrez for mixed-use in Chelsea

Penn South Capital through the entity 123 1st By 94 LLC paid $4.3 million to Daniel Gutierrez through the entity 137 West 14th Street LLC for midblock mixed-use building at 137 West 14th Street in Chelsea, Manhattan.
The deal closed on June 8, 2022 and was recorded on June 23, 2022. The property has 6,675 square feet of built space according to PincusCo analysis of city data. The sale price per built square foot is $644 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 Daniel Gutierrez was Daniel Gutierrez. The signatory for Penn South Capital was Parag Sawhney. The financing for this acquisition is a purchase-money mortgage.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer Penn South Capital purchased eight properties in seven transactions for a total of $54.4 million and sold three properties in three transactions for a total of $58.7 million over the past 24 months.
The seller Daniel Gutierrez had not purchased any other properties and had not sold any properties over the same time period. The 6,675-square-foot property generated revenue of $479,332 or $72 per square foot, according to the most recent income and expense figures.

The property

The 137 West 14th Street parcel has frontage of 25 feet and is 103 feet deep with a total lot size of 2,581 square feet. 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 one DOB violation 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 Chelsea, the bulk, or 35 percent of the 62.6 million square feet of commercial built space are residential elevator buildings, with office buildings next occupying 30 percent of the space. In sales, Chelsea has the 2nd highest sale turnover among other neighborhoods in the city with $2.3 billion in sales volume in the last two years. For development, Chelsea has 1.4 times the average amount of major developments relative to other neighborhoods and is the 16th 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 2 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of seven of the 24 commercial properties representing 106,724 square feet of the 695,024 square feet. The largest owner is Stonehenge NYC, followed by Nathanial Rahav and then Superior Management. There are two active new building construction projects totaling 121,483 square feet. The largest is a 61-unit, 61,102-square-foot R-2 building developed by Matt Baldwin with plans filed May 1, 2020 and it has not been permitted yet. The second largest is a 44-unit, 60,381-square-foot R-2 building developed by Brian Ferrier with plans filed December 20, 2017 and permitted August 6, 2019.

The majority, or 74 percent of the 809,263 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 Penn South Capital owned at least eight commercial properties with 50,357 square feet and a city-determined market value of $29 million. (Market value is typically about 50% of actual value.) The portfolio has $57.8 million in debt, with top three lenders as Shelter Growth Capital Partners, Midcap Financial, and MidCap Financial respectively. Within the portfolio, the bulk, or 66 percent of the 50,357 square feet of built space are walkup properties, with retail properties next occupying 17 percent of the space. They are all located in Manhattan.

Surrounding

Within a 400-foot radius of 137 West 14th Street, PincusCo identified seven commercial real estate items of interests occurred over the past 24 months.
Of those seven items, two were sales above $5 million totaling $38.8 million. The most recent of the two was Gavin Coulson which bought the 2,395-square-foot, four-unit four-family building (C3) on 137 West 13th Street for $16.7 million from RoundSquare Development on February 11, 2022.
Of those seven items, five were loans above $5 million totaling $57 million. The most recent of the five was Nathanial Rahav which borrowed $9.5 million from Signature Bank secured by the 7,650-square-foot, nine-unit rental (C7) on 149 West 14th Street and two other properties on May 9, 2022.

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