Phipps Houses pays $8.7M to Alexander Svecherny for office in Melrose

Phipps Houses through the entity 860 Courtlandt Avenue Associates LLC paid $8.7 million to Alexander Svecherny through the entity 860 Courtland Ave LLC for the office building at 860 Courtlandt Avenue in Melrose, Bronx.
The deal closed on June 8, 2022 and was recorded on June 21, 2022. The property has 29,130 square feet of built space and 37,322 square feet of additional air rights for a total buildable of 66,522 square feet according to PincusCo analysis of city data. The sale price per built square foot is $298 and the price per buildable square foot is $130 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 March 16, 2017, for $5.7 million. The signatory for Alexander Svecherny was Alexander Svecherny. The signatory for Phipps Houses was Michael Wadman. Michael Wadman is the vice president of Phipps Houses.

Prior sales and revenue

Prior to this transaction, Pincusco has records that the buyer Phipps Houses purchased seven properties in four transactions for a total of $33.4 million and has no record it sold any properties over the past 24 months.
The seller Alexander Svecherny had not purchased any other properties and had not sold any properties over the same time period. The 29,130-square-foot property generated revenue of $1.1 million or $38 per square foot, according to the most recent income and expense figures.

The property

The 860 Courtlandt Avenue parcel has frontage of 101 feet and is 192 feet deep with a total lot size of 19,338 square feet. The lot is irregular. The zoning is R7-2 which allows for up to 3.44 times floor area ratio (FAR) for residential. The city-designated market value for the property in 2022 is $6.9 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 and $3,050 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 neighborhood

In Melrose, the majority, or 51 percent of the 9 million square feet of commercial built space are residential elevator buildings, with residential walkup buildings next occupying 15 percent of the space. In sales, Melrose has the 36th highest sale turnover among other neighborhoods in Bronx with $10.7 million in sales volume in the last two years. For development, Melrose has had very little major development activity relative to other neighborhoods.It had 164,342 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 four of the 12 commercial properties representing 127,973 square feet of the 240,946 square feet. The largest owner is Phipps Houses, followed by Henry Levi and then Alma Realty. There are no active new building construction projects on this tax block.

The majority, or 38 percent of the 143,093 square feet of built space are residential elevator buildings, with residential walkup buildings next occupying 36 percent of the space.

The buyer

The PincusCo database currently indicates that Phipps Houses owned at least 112 commercial properties with 6,882,570 square feet and a city-determined market value of $550.9 million. (Market value is typically about 50% of actual value.) The portfolio has $1 billion in debt, with top three lenders as NYC Housing Development Corporation, Citibank, and City of New York respectively. Within the portfolio, the bulk, or 67 percent of the 6,882,570 square feet of built space are elevator properties, with rental condo properties next occupying 17 percent of the space. The bulk, or 59 percent of the built space, is in Bronx, with Manhattan next at 29 percent of the space.

Surrounding

PincusCo has not identified any commercial real estate items of interest within a 400-foot radius of 860 Courtlandt Avenue that occurred over the past 24 months.

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