Sierra Assets Group sells three mixed-use properties forming Carnegie Hill corner for $13.1M

The entity 1256 Lexington Ave LLC, whose ownership could not be determined, using the 1031 exchange intermediary Asset Preservation Inc., paid $13.1 million to Sierra Assets Group through the entity 1256-60 Lexco LLC for the four-unit mixed-use building (S9) at 1260 Lexington Avenue, the three-unit mixed-use building (S3) at 1256 Lexington Avenue and the three-unit mixed-use building (S3) at 1258 Lexington Avenue, all in Carnegie Hill, Manhattan. The three buildings are on the southwest corner of Lexington Avenue and 85th Street.
The deal closed on December 9, 2022 and was recorded on December 16, 2022. The three properties have 14,632 square feet of built space and 22,923 square feet of additional air rights for a total buildable of 37,566 square feet according to PincusCo analysis of city data. The sale price per built square foot is $894 and the price per buildable square foot is $348 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 Sierra Assets Group was Howard Sorkin. The signatory for Asset Preservation Inc. was Diane Fox. Asset Preservation Incorporated is, according to its website, a “national leader in 1031 exchange companies, having successfully completed over 200,000 IRC Section 1031 exchanges.” While API is the buyer and Diane Fox an executive at the firm, the true owner could not be determined.

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 1260 Lexington Avenue.

Prior sales and revenue

Prior to this transaction, PincusCo has no record that the buyer Asset Preservation Inc. had purchased any other properties and has no record it sold any properties over the past 24 months.
The seller Sierra Assets Group 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 Howard Sorkin, head officer and Jason Sorkin, officer. The business entity is 1256-60 Lexco Llc; Howard 601 Llc & Harvey 601 Llc.

The property

The 1260 Lexington Avenue parcel has frontage of 22 feet and is 67 feet deep with a total lot size of 1,488 square feet. The zoning is C1-8X which allows for up to 2 times floor area ratio (FAR) for commercial and up to 9 times FAR for residential with inclusionary housing. The city-designated market value for the property in 2022 is $3.7 million.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the properties since September of 2020. In addition, according to city public data, the properties have received 11 housing violations and $705 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 Carnegie Hill, the majority, or 57 percent of the 13.6 million square feet of commercial built space are elevator buildings, with walkup buildings next occupying 17 percent of the space. In sales, Carnegie Hill has 3.4 times the average sales volume among other neighborhoods with $1.2 billion in sales volume in the last two years and is the 12th highest in Manhattan. For development, Carnegie Hill has had very little major development activity relative to other neighborhoods.It had 873,518 square feet of commercial and multi-family construction under development in the last two years, which represents 6 percent of the neighborhood’s built space.

The block

On the tax block of 1260 Lexington Avenue, PincusCo has identified the owners of six of the 28 commercial properties representing 82,345 square feet of the 405,553 square feet. The largest owner is HUBB NYC, followed by Dimitri N. Kessaris and then Parkoff Organization.
There are no active new building construction projects on this tax block.

The majority, or 35 percent of the 374,167 square feet of built space are elevator buildings, with walkup buildings next occupying 22 percent of the space.

The seller

The PincusCo database currently indicates that Sierra Assets Group owned at least two commercial properties in New York City with 63,510 square feet and a city-determined market value of $14.2 million. (Market value is typically about 50% of actual value.) The portfolio has $25.4 million in debt, borrowed from Capital One and Signature Bank. Within the portfolio, the bulk, or 73 percent of the 63,510 square feet of built space are elevator properties, with retail properties next occupying 27 percent of the space. The bulk, or 73 percent of the built space, is in Brooklyn, with Manhattan next at 27 percent of the space.

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