United Developers pays $2.85M for foreclosed office in Penn Plaza

United Developers through the entity West 31 Associates LLC paid $2.85 million for the office building (O5) at 252 West 31st Street in Penn Plaza, Manhattan. The former owner Juan Ortiz lost the property in a foreclosure auction in February.

The deal closed on March 1, 2024 and was recorded on March 7, 2024. The property has 4,062 square feet of built space and 268 square feet of additional air rights for a total buildable of 4,330 square feet according to a PincusCo analysis of city data. The sale price per built square foot is $701 and the price per buildable square foot is $658 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 the court was Jerry A. Merola. The signatory for United Developers was Abolfazl Somedi. The contract date was February 14, 2024. This is an unusually small parcel of land facing the south side of Madison Square Garden. Jerry A. Merola is the referee in the foreclosure case against the previous owner, Juan Ortiz. 850269/2021

This is an unusually small city lot, with 25 feet of frontage but only 34′ 9″ deep, while most lots are 100 feet deep. Juan Ortiz bought the property in 1989, then in January 2020 borrowed $2.3 million from Valley National Bank, which then initiated foreclosure in April 2021. In December 2023, Valley National Bank assigned the loan to an anonymous note buyer, 252 West 31st Lender LLC. The auction was February 14, 2024. Matthew Ahdoot and Daniel Badalov won the auction with a bid of $2.85 million, then assigned their contract to the buyer entity, which is located at the address of Matthew Ahdoot’s United Developers.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer United Developers purchased five properties in four transactions for a total of $11 million and sold one property in one transactions for a total of $5.6 million over the past 24 months.
The seller Juan Ortiz had not purchased any other properties and had not sold any properties over the same time period.

The property

The office building in Penn Plaza has 4,062 square feet of built space and 268 square feet of additional air rights for a total buildable of 4,330 square feet according to a PincusCo analysis of city data. The parcel has frontage of 25 feet and is 34 feet deep with a total lot size of 866 square feet. The lot is irregular. The zoning is M1-5 which allows for up to 5 times floor area ratio (FAR) for manufacturing. The city-designated market value for the property in 2022 is $1.3 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 $4,500 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 Penn Plaza, The majority, or 76 percent of the 20.4 million square feet of commercial built space are office buildings, with hotel buildings next occupying 8 percent of the space. In sales, Penn Plaza has near average sales volume among other neighborhoods with $294.6 million in sales volume in the last two years and is the 27th highest in Manhattan. For development, Penn Plaza has 1.2 times the average amount of major developments relative to other neighborhoods and is the 23rd highest in Manhattan. It had 1.2 million 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 this tax block, PincusCo has identified the owners of five of the 18 commercial properties representing 447,993 square feet of the 1,026,542 square feet. The largest owner is Pat Reilly Inc. Of General Property Mgmt, followed by Oz Avraham and then Hsp Real Estate.
There are no active new building construction projects on this tax block.

The majority, or 70 percent of the 1 million square feet of built space are office buildings, with industrial buildings next occupying 24 percent of the space.

The buyer

The PincusCo database currently indicates that United Developers owned at least six commercial properties in New York City with 21,533 square feet and a city-determined market value of $4.7 million. (Market value is typically about 50% of actual value.) Within the portfolio, the bulk, or 60 percent of the 21,533 square feet of built space are retail properties, with mixed-use properties next occupying 23 percent of the space. The bulk, or 62 percent of the built space, is in Queens, with Bronx next at 21 percent of the space.

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