Penn South pays $22M to Kushner for walkups in Alphabet City, part of $41M deal

Penn South Capital through the entity 170-174ev1 LLC paid $22 million to Kushner Companies through the entity Village Kf 2 Associates LLC for the 36-unit residential walkup building (C7) at 170 East 2nd Street in Alphabet City, Manhattan and nine-unit residential walkup building (C7) at 174 East 2nd Street in Alphabet City, Manhattan. This is the second part of a $41 million deal reported earlier. The previously recorded properties totaled $14.7 million.

The sales closed on January 30, 2024 and were recorded on February 8, 2024. The two properties have 22,914 square feet of built space and 3,784 square feet of additional air rights for a total buildable of 26,712 square feet according to a PincusCo analysis of city data. The sale price per built square foot is $959 and the price per buildable square foot is $823 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 Kushner Companies was Matthew Burrows. The signatory for Penn South Capital was Parag Sawhney. The contract date was September 29, 2023.

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 170 East 2nd Street.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer Penn South Capital, led by Parag Sawhney and Raymond Chera, purchased 14 properties in 14 transactions for a total of $75 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 14 properties in 10 transactions for a total of $155.1 million over the same time period. The former owners according to the Department of Housing Preservation and Development includes Tara Dexter, head officer and Robinson Severino, site manager. The business entity is Village Kf 2 Associates Llc.

The property

The residential walkup building with 36 residential units in Alphabet City has 22,914 square feet of built space and 3,784 square feet of additional air rights for a total buildable of 26,712 square feet according to a PincusCo analysis of city data. The parcel has frontage of 42 feet and is 106 feet deep with a total lot size of 4,452 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 $7.4 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 properties for the past 24 months. In addition, according to city public data, the properties have received three housing violations and $500 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 block

On the tax block of 170 East 2nd Street, PincusCo has identified the owners of 11 of the 21 commercial properties representing 232,052 square feet of the 362,982 square feet. The largest owner is Weinstein Realty Group, followed by Skyline Developers and then Sassouni Management.
There are no active new building construction projects on this tax block.

The majority, or 43 percent of the 362,982 square feet of built space are walkup buildings, with elevator buildings next occupying 42 percent of the space.

The seller

The PincusCo database currently indicates that Kushner Companies owned at least 42 commercial properties with 725 residential units in New York City with 429,657 square feet and a city-determined market value of $167 million. (Market value is typically about 50% of actual value.) The portfolio has $520.8 million in debt, with top three lenders as AIG, Argentic Investment Management, and MSC 2019-L3 respectively. Within the portfolio, the bulk, or 89 percent of the 429,657 square feet of built space are walkup properties, with elevator properties next occupying 7 percent of the space. The bulk, or 89 percent of the built space, is in Manhattan, with Brooklyn next at 11 percent of the space.

The buyer

The PincusCo database currently indicates that Penn South Capital owned at least 20 commercial properties with 140 residential units in New York City with 121,481 square feet and a city-determined market value of $61.2 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 52 percent of the 121,481 square feet of built space are walkup properties, with mixed-use properties next occupying 12 percent of the space. The bulk, or 75 percent of the built space, is in Manhattan, with Brooklyn next at 25 percent of the space.

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