Simone Development pays $12M to Madison International Realty for ground leased properties in Pelham Bay

Simone Development Companies through the entity 1720 Eastchester Realty LLC paid $12 million to Madison International Realty through the entity MIR Castle Center Associates, LLC for the retail building (K1) at 1730 Eastchester Road in Pelham Bay, Bronx, development building (V1) at 1742 Eastchester Road in Pelham Bay, Bronx, and development building (V1) at 1724 Eastchester Road in Pelham Bay, Bronx.
The deal closed on October 2, 2023 and was recorded on October 12, 2023. The eight properties have 62,660 square feet of built space and 76,515 square feet of additional air rights for a total buildable of 139,279 square feet according to a PincusCo analysis of city data. The sale price per built square foot is $191 and the price per buildable square foot is $86 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 Madison International Realty was Ronald M. Dickerman. The signatory for Simone Development Companies was Joseph Simone. This is the sale of a ground lease covering the nine parcels. Madison International Realty acquired full control of these parcels in 2018 from Forest City Ratner at a valuation of $18.14 million.

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 1730 Eastchester Road.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer Simone Development Companies purchased five properties in two transactions for a total of $43.1 million and sold one property in one transactions for a total of $6 million over the past 24 months.
The seller Madison International Realty had not purchased any other properties and had not sold any properties over the same time period. Out of the eight properties, one with a total of 62,660 square feet of built space generated revenue of $2.6 million per year.

The property

The retail building in Pelham Bay has 62,660 square feet of built space and 76,515 square feet of additional air rights for a total buildable of 139,279 square feet according to a PincusCo analysis of city data. The parcel has frontage of 211 feet and is 167 feet deep with a total lot size of 92,299 square feet. The lot is irregular. The zoning is M1-1 which allows for up to 1 times floor area ratio (FAR) for manufacturing The city-designated market value for the property in 2022 is $16.7 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 $650 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 Pelham Bay, The bulk, or 27 percent of the 6.8 million square feet of commercial built space are elevator buildings, with specialty buildings next occupying 23 percent of the space. In sales, Pelham Bay has the 19th highest sale turnover among other neighborhoods in Bronx with $87.7 million in sales volume in the last two years. For development, Pelham Bay has had very little major development activity relative to other neighborhoods.It had 362,819 square feet of commercial and multi-family construction under development in the last two years, which represents 5 percent of the neighborhood’s built space.

The block

On the tax block of 1730 Eastchester Road, PincusCo has identified the owners of four of the 33 commercial properties representing 854,934 square feet of the 3,871,107 square feet. The largest owner is Salvatore Zottola General Partner, followed by Realterm and then City Of New York.
On the tax block, there was one new building construction project filed totaling 18,619 square feet. It is a 18,619 square-foot storage (S-1) building submitted by Donald Engels with plans filed September 25, 2018 and it has not been permitted yet.

The majority, or 58 percent of the 3.9 million square feet of built space are specialty buildings, with industrial buildings next occupying 28 percent of the space.

The seller

The PincusCo database currently indicates that Madison International Realty owned at least 14 commercial properties with 892 residential units in New York City with 670,570 square feet and a city-determined market value of $85.9 million. (Market value is typically about 50% of actual value.) Within the portfolio, the bulk, or 75 percent of the 670,570 square feet of built space are elevator properties, with walkup properties next occupying 25 percent of the space. The bulk, or 38 percent of the built space, is in Manhattan, with Brooklyn next at 36 percent of the space.

The buyer

The PincusCo database currently indicates that Simone Development Companies owned at least one commercial property in New York City with 14,000 square feet and a city-determined market value of $2.2 million. (Market value is typically about 50% of actual value.) The portfolio has $236.9 million in debt, with top three lenders as Bank of America, Union Labor Life Insurance Company, and Metropolitan Commercial Bank respectively. The portfolio consists of at least a single industrial property. It is located in Bronx.

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