Starwood acquires landmarked Chelsea townhouse following $9.2M foreclosure

Starwood Capital Group through the entity 241 Norwood, LLC as the former lender acquired the landmarked three-unit building (C0) at 241 West 14th Street in Chelsea, Manhattan through a judicial foreclosure. The former owner was Benjamin Shaoul’s Magnum Real Estate Group. The transfer price was the auction amount of $3 million. This is not an arms length transaction because Starwood was the note holder and took the property back at auction.
The deal closed on July 12, 2024 and was recorded on July 26, 2024. The property has 7,830 square feet of built space and 10,294 square feet of additional air rights for a total buildable of 18,120 square feet according to a PincusCo analysis of city data. The sale price per built square foot is $383 and the price per buildable square foot is $165 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 November 21, 2006, for $8.2 million. The signatory for Magnum Real Estate Group was referee Mark McKew. The signatory for Starwood Capital Group was Rina Paniry. The contract date was July 12, 2024. This is a foreclosure sale through 850055/2022. The former owner was Benjamin Shaoul’s Magnum Real Estate Group, which borrowed $9.2 million in 2016. The buyer is the note holder, so this is not an arms length transaction. The property is an individual city landmark built in 1847, the Andrew Norwood House. The lender 241 Norwood LLC, is in care of Starwood Property Trust, and bought the note in October 2021.

Prior sales and revenue

Prior to this transaction, PincusCo has no record that the buyer Starwood Capital Group had purchased any other properties and sold two properties in two transactions for a total of $237.7 million over the past 24 months.
The seller Magnum Real Estate Group had not purchased any other properties and sold three properties in one transaction for a total of $30 million over the same time period.

The property

The building with 3 residential units in Chelsea has 7,830 square feet of built space and 10,294 square feet of additional air rights for a total buildable of 18,120 square feet according to a PincusCo analysis of city data. The parcel has frontage of 29 feet and is 103 feet deep with a total lot size of 3,010 square feet. The zoning is C6-2A which allows for up to 6 times floor area ratio (FAR) for commercial and up to 6.02 times FAR for residential with inclusionary housing. The property is in the Individual Landmark. The city-designated market value for the property in 2022 is $17.8 million.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the property for the past 24 months. In addition, according to city public data, the property has received $350 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 this tax block, PincusCo has identified the owners of 15 of the 33 commercial properties representing 379,396 square feet of the 731,500 square feet. The largest owner is Albert Rabizadeh, followed by Brand Family Realty and then Christine Urban.
On the tax block, there were three new building construction projects totaling 156,390 square feet. The largest is a 25-unit, 110,081 square-foot residential (R-2) building submitted by Giorgio Cassina|Marco Martegiani|Alfredo Vinci and filed by Alfredo Vinci with plans filed September 23, 2014 and permitted December 3, 2018. The second largest is a 21-unit, 36,712 square-foot residential (R-2) building submitted by Adellco and filed by Ann Eber with plans filed September 11, 2014 and permitted December 1, 2015.

The majority, or 44 percent of the 731,500 square feet of built space are elevator buildings, with office buildings next occupying 25 percent of the space.

The seller

The PincusCo database currently indicates that Magnum Real Estate Group owned at least three commercial properties with 34 residential units in New York City with 34,476 square feet and a city-determined market value of $15.6 million. (Market value is typically about 50% of actual value.) The portfolio has $158.2 million in debt, with top three lenders as Ares Management, JPMorgan Chase, and Labini Investments Limited respectively. Within the portfolio, the bulk, or 79 percent of the 34,476 square feet of built space are elevator properties, with retail properties next occupying 14 percent of the space. They are all located in Manhattan.

The buyer

The PincusCo database currently indicates that Starwood Capital Group owned at least four commercial properties in New York City with 352,035 square feet and a city-determined market value of $101.3 million. (Market value is typically about 50% of actual value.) The portfolio has $189.9 million in debt, with top three lenders as Barclays, Centennial Bank, and JPMorgan Chase respectively. Within the portfolio, the bulk, or 57 percent of the 352,035 square feet of built space are hotel properties, with specialty properties next occupying 42 percent of the space. The bulk, or 43 percent of the built space, is in Brooklyn, with Bronx next at 42 percent of the space.

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