Prime Group Holdings pays $49.5M to Artemis for commercial in Chelsea

Storage company Prime Group Holdings and Empire Capital Holdings through the entity Prime Storage Empire Capital Twenty-Fifth Street W paid $49.5 million to Artemis Real Estate Partners through the entity AL 511 West 25th Street Owner, LLC for the office building (O6) at 511 West 25th Street in Chelsea, Manhattan and mixed-use building (K9) at 521 West 25th Street in Chelsea, Manhattan. The expected use is cash flowing.

The sale price for the two buildings has fluctuated wildly in the past 13 years. Related Companies bought them in 2012 for $93 million, then sold them to L&L Holding and PGIM for $160 million in 2014. They sold to Artemis for $148 million in 2019, city records show.
The latest sale closed on January 21, 2025 and was recorded on January 28, 2025. The two properties have 164,677 square feet of built space and 42,461 square feet of additional air rights for a total buildable of 172,885 square feet according to a PincusCo analysis of city data. The sale price per built square foot is $300 and the price per buildable square foot is $286 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 Artemis Real Estate Partners was Jim Smith. The signatory for Prime Group Holdings was Robert Moser. The contract date was December 20, 2024.
The Real Deal reported on the sale before it closed. The Commercial Observer identified the broker as a team from Newmark including Adam Spies.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer Prime Group Holdings purchased three properties in one transaction for a total of $22.9 million and has no record it sold any properties over the past 24 months.
The seller Artemis Real Estate Partners had not purchased any other properties and had not sold any properties over the same time period. Out of the two properties, one with a total of 164,677 square feet of built space generated revenue of $6.2 million per year.

The property

The mixed-use building in Chelsea has 164,677 square feet of built space and 42,461 square feet of additional air rights for a total buildable of 172,885 square feet according to a PincusCo analysis of city data. The parcel has frontage of 250 feet and is 98 feet deep with a total lot size of 24,687 square feet. The zoning is M1-5 which allows for up to 5 times floor area ratio (FAR) for manufacturing The property is in the West Chelsea Historic District. The city-designated market value for the property in 2022 is $30.3 million.

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 $3,250 in OATH penalties in the last year.

Development

For the tax lot buildings, one out of the two buildings received a initial certificate of occupancy in the last ten years. On these lots, there is one active major alteration construction project, 122762787, for a 79,936 square-foot B building. The project was submitted by William Potts with plans filed April 26, 2016 and permitted October 4, 2018.

The neighborhood

In Chelsea, The bulk, or 35 percent of the 52.5 million square feet of commercial built space are office buildings, with elevator buildings next occupying 28 percent of the space. In sales, Chelsea has the 6th highest sale turnover among other neighborhoods in the city with $1.4 billion in sales volume in the last two years. For development, Chelsea has 1.6 times the average amount of major developments relative to other neighborhoods and is the 20th highest in Manhattan. It had 1.8 million square feet of commercial and multi-family construction under development in the last two years, which represents 3 percent of the neighborhood’s built space. There were two pre-foreclosure suit filed among other mixed-use buildings in the past 12 months.

The block

On the tax block of 521 West 25th Street, PincusCo has identified the owners of four of the 10 commercial properties representing 304,283 square feet of the 941,138 square feet. The largest owner is Douglas Oliver, followed by Artemis Real Estate Partners and then Moinian Group.
On the tax block, there were three new building construction projects totaling 424,574 square feet. The largest is a 43-unit, 148,125 square-foot residential (R-2) building submitted by Moinian Group and filed by Aron Kirsch with plans filed July 15, 2016 and it has not been permitted yet. The second largest is a 148,114 square-foot business (B) building submitted by Moinian Group and filed by Aron Kirsch with plans filed June 13, 2019 and permitted May 20, 2020.

The majority, or 63 percent of the 941,138 square feet of built space are office buildings, with specialty buildings next occupying 23 percent of the space.

The seller

The PincusCo database currently indicates that Artemis Real Estate Partners owned at least one commercial property in New York City with 83,612 square feet and a city-determined market value of $29.7 million. (Market value is typically about 50% of actual value.) The portfolio consists of at least a single office property. It is located in Manhattan.

The buyer

The PincusCo database currently indicates that Prime Group Holdings owned at least 13 commercial properties in New York City with 742,783 square feet and a city-determined market value of $97 million. (Market value is typically about 50% of actual value.) The portfolio has $230 million in debt, with top three lenders as Slate Asset Management, Citibank, and Societe Generale respectively. Within the portfolio, all identified are industrial properties. The bulk, or 38 percent of the built space, is in Queens, with Bronx next at 33 percent of the space.

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