Penn South Capital pays $6M for mixed-use in Williamsburg

Parag Sawhney’s Penn South Capital through the entity 306 Graham RLA LLC paid $6 million to members of the Sarro family for the five-unit mixed-use building (O9) at 308 Graham Avenue in Williamsburg, Brooklyn.
The deal closed on December 15, 2023 and was recorded on January 22, 2024. The property has 12,780 square feet of built space and 2,199 square feet of additional air rights for a total buildable of 14,997 square feet according to a PincusCo analysis of city data. The sale price per built square foot is $469 and the price per buildable square foot is $400 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 Anthony J. Sarro and Theresa Sarro was Anthony J. Sarro and Theresa Sarro. The signatory for Penn South Capital was Parag Sawhney. The contract date was December 13, 2023.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer Penn South Capital purchased 12 properties in 12 transactions for a total of $60.3 million and sold two properties in two transactions for a total of $13 million over the past 24 months.
The seller Anthony J. Sarro 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 Anthony Sarro Jr, head officer and Anthony Sarro, head officer. The business entity is Tanm Irrevocable Trust.

The property

The office building with 5 residential units in Williamsburg has 12,780 square feet of built space and 2,199 square feet of additional air rights for a total buildable of 14,997 square feet according to a PincusCo analysis of city data. The parcel has frontage of 50 feet and is 100 feet deep with a total lot size of 4,999 square feet. The zoning is R6A which allows for up to 3 times floor area ratio (FAR) for residential with inclusionary housing. The city-designated market value for the property in 2022 is $1.9 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 $50 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 $1 million on this tax lot.

The neighborhood

In Williamsburg, The bulk, or 39 percent of the 50.4 million square feet of commercial built space are elevator buildings, with walkup buildings next occupying 25 percent of the space. In sales, Williamsburg has the 5th highest sale turnover among other neighborhoods in the city with $2.3 billion in sales volume in the last two years. For development, Williamsburg is the 8th most active neighborhood among other neighborhoods. It had 4.5 million square feet of commercial and multi-family construction under development in the last two years, which represents 9 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of two of the six commercial properties representing 11,912 square feet of the 54,361 square feet. The two identified owners are Zofia Stec and Paul Scarola.
There are no active new building construction projects on this tax block.

The majority, or 50 percent of the 54,361 square feet of built space are walkup buildings, with elevator buildings next occupying 27 percent of the space.

The buyer

The PincusCo database currently indicates that Penn South Capital owned at least 17 commercial properties with 111 residential units in New York City with 93,313 square feet and a city-determined market value of $52.9 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 55 percent of the 93,313 square feet of built space are walkup properties, with C3 properties next occupying 13 percent of the space. The bulk, or 81 percent of the built space, is in Manhattan, with Brooklyn next at 19 percent of the space.

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