Urban American buys out insolvent Australian partner stake in Astoria holdings for $8.4M

Urban American Management through the entity UA 34th Street II, LLC acquired an interest from the US Masters Residential Property Fund through the entity 34 Astoria Investors LLC, valued at $8.4 million for the 36-unit residential walkup building (C1) at 30-58 34th Street and the 36-unit residential walkup building (C1) at 30-64 34th Street in Astoria, Queens. The fund is an affiliate of the insolvent Australian asset management firm Dixon Advisory. As of March 31, 2024, the fund had nearly $80 million in sales of property in the pipeline.
The deal closed on July 11, 2024 and was recorded on July 25, 2024. The two properties have 49,600 square feet of built space according to a PincusCo analysis of city data. The sale price per built square foot is $168 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.)
Dixon Advisory, also known as Evans Dixon, launched the US Masters Residential Property Fund in 2011 to buy multifamily properties in New York and New Jersey. Dixon Advisory became insolvent and in January 2022 was administered by outside executives, and the fund is liquidating its assets.

In April 2024, an Australian federal court hearing the insolvency case ruled, “In short, the Court endorsed the Deed Administrators’ position that, of the former clients of DASS [Dixon Advisory], only those with investments in the US Masters Residential Property Fund (specifically the Australian Securities Exchange listed URF Equities).”

“In September 2022, the Federal Court imposed a $7.2 million penalty on Dixon Advisory over its investment advice. The court found that on 53 occasions between October 2015 and May 2019, Dixon Advisory was the responsible licensee of six representatives who did not act in the best interests of eight clients when they advised these clients to acquire, roll over or retain interests in the US Masters Residential Property Fund (URF) and URF-related products.”

This sale to partner Urban American is part of that liquidation.

According to the funds first quarter 2024 filing, “As of the end of the quarter, the Fund had a total of US$77.85 million worth of assets in the sales pipeline which were either under contract, on the market, or being prepared for sale. Additionally, and as has been mentioned previously, the Fund has continued the process of exiting its multifamily assets with Urban American. The Fund remains under contract to sell its equity interest in the Joint Venture which owns the largest multifamily asset (in Astoria, Queens) to Urban American. This asset represents A$4.8 million [Australian dollars] of the A$6.1 million [Australian dollars] total equity across all three partnerships and has an anticipated closing date of June 2024. The Fund will continue to seek a resolution for the remaining two multifamily assets, whether it be exiting to Urban American or a third party buyer.”

Prior sales and revenue

Prior to this transaction, PincusCo has no record that the buyer Urban American Management had purchased any other properties and has no record it sold any properties over the past 24 months.
The seller Dixon Advisory 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 Antoinette Travaglino, head officer and Jana Schmidt, officer. The business entity is 30-58/64 34th Street Llc.

The property

The residential walkup buildings with 72 residential units in Astoria have 49,600 square feet of built space according to a PincusCo analysis of city data. One of the buildings parcel has frontage of 75 feet and is 97 feet deep with a total lot size of 7,274 square feet. The zoning is R6A which allows for up to 3 times floor area ratio (FAR) for residential with inclusionary housing. The city-designated market value for the property in 2022 is $4.4 million. The most recent loan totaled $8 million and was provided by Flagstar Bank on September 8, 2023.

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 not received any significant violations 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 the tax block of 30-58 34th Street, PincusCo has identified the owners of 17 of the 49 commercial properties representing 243,874 square feet of the 506,824 square feet. The largest owner is Vincent Ansanelli, followed by Urban American Management and then Shahena Salim.
There are no active new building construction projects on this tax block.

The majority, or 79 percent of the 506,824 square feet of built space are walkup buildings, with mixed-use buildings next occupying 11 percent of the space.

The buyer

The PincusCo database currently indicates that Urban American Management owned at least 17 commercial properties with 1,036 residential units in New York City with 785,090 square feet and a city-determined market value of $99 million. (Market value is typically about 50% of actual value.) The portfolio has $187.6 million in debt, with top three lenders as MetLife, New York Community Bank, and Spencer Savings Bank respectively. Within the portfolio, the bulk, or 73 percent of the 785,090 square feet of built space are elevator properties, with walkup properties next occupying 27 percent of the space. The bulk, or 37 percent of the built space, is in Queens, with Manhattan next at 33 percent of the space.

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