Penn South pays $4.8M to Kushner for mixed-use in East Village, part of $41M portfolio deal

Penn South Capital through the entity 99ev1 LLC paid $4.8 million to Kushner Companies through the entity Ev 1st Avenue Property Owner, L.P. for the four-unit mixed-use building (S4) at 99 East 3rd Street in East Village, Manhattan. This is part of a $41 million portfolio sale.
The deal closed on January 30, 2024 and was recorded on February 12, 2024. The property has 4,163 square feet of built space according to a PincusCo analysis of city data. The sale price per built square foot is $1,158 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 seller bought the property on September 18, 2013, for $4.8 million. The signatory for Kushner Companies was Matthew Burrows. The signatory for Penn South Capital was Parag Sawhney. The contract date was September 29, 2023.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer Penn South Capital purchased 16 properties in 15 transactions for a total of $97 million and sold two properties in two transactions for a total of $13 million over the past 24 months.
The seller Kushner Companies had not purchased any other properties and sold 16 properties in 11 transactions for a total of $177.1 million over the same time period. The former owners according to the Department of Housing Preservation and Development includes Tara Dexter, head officer and Cesar Cruz, site manager. The business entity is Ev 1st Avenue Property Owner Lp.

The property

The mixed-use building with 4 residential units in East Village has 4,163 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 20 feet and is 48 feet deep with a total lot size of 961 square feet. The zoning is R7A which allows for up to 4 times floor area ratio (FAR) for residential with inclusionary housing. The city-designated market value for the property in 2022 is $2 million. The most recent loan totaled $36.5 million and was provided by Citibank on November 21, 2019.

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 $975 in OATH penalties in the last year.

Development

For the tax lot building, it received its initial certificate of occupancy on January 24, 2013. There are no active new building construction projects or major alteration projects with initial costs more than $1 million on this tax lot.

The neighborhood

In East Village, The bulk, or 44 percent of the 15.5 million square feet of commercial built space are walkup buildings, with elevator buildings next occupying 20 percent of the space. In sales, East Village has 1.7 times the average sales volume among other neighborhoods with $501.4 million in sales volume in the last two years and is the 18th highest in Manhattan. For development, East Village has had very little major development activity relative to other neighborhoods.It had 350,442 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. 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 28 of the 36 commercial properties representing 450,886 square feet of the 528,717 square feet. The largest owner is Yuco Management, followed by Yong Hong Guan and then Alistair Economakis.
There are no active new building construction projects on this tax block.

The majority, or 52 percent of the 528,717 square feet of built space are walkup buildings, with elevator buildings next occupying 44 percent of the space.

The seller

The PincusCo database currently indicates that Kushner Companies owned at least 40 commercial properties with 680 residential units in New York City with 406,743 square feet and a city-determined market value of $155.9 million. (Market value is typically about 50% of actual value.) The portfolio has $520.8 million in debt, with top three lenders as AIG, MSC 2019-L3, and Argentic Investment Management respectively. Within the portfolio, the bulk, or 89 percent of the 406,743 square feet of built space are walkup properties, with elevator properties next occupying 8 percent of the space. The bulk, or 88 percent of the built space, is in Manhattan, with Brooklyn next at 12 percent of the space.

The buyer

The PincusCo database currently indicates that Penn South Capital owned at least 22 commercial properties with 185 residential units in New York City with 144,395 square feet and a city-determined market value of $72.3 million. (Market value is typically about 50% of actual value.) The portfolio has $92.3 million in debt, with top three lenders as KeyBank, Shelter Growth Capital Partners, and Midcap Financial respectively. Within the portfolio, the bulk, or 59 percent of the 144,395 square feet of built space are walkup properties, with mixed-use properties next occupying 10 percent of the space. The bulk, or 79 percent of the built space, is in Manhattan, with Brooklyn next at 21 percent of the space.

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