Vanbarton Group sells former Prodigy FiDi building for $64.5M, buyer gets $62M loan

The entity 17 John Property Owner LLC in care of the Brooklyn law firm Breuer Herskowitz in partnership with Midtown-based management firm Housing Solutions paid $64.5 million to Vanbarton Group through the entity 17 John Street Property Owner LLC for the hotel building (HS) at 17 John Street in Financial District, Manhattan. The expected use is cash flowing.

The buyer obtained a $62 million acquisition and renovation loan from Acore Capital.
The deal closed on July 16, 2024 and was recorded on August 1, 2024. The property has 111,423 square feet of built space according to a PincusCo analysis of city data. The sale price per built square foot is $578 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.)
Shorewood Real Estate Group and Prodigy Network bought the property on August 28, 2014, for $85.3 million.
The signatory for Vanbarton Group was Damiano Buffa. The signatory for the buyer was Jason Herskowitz. The signatory for Acore Capital was Jason Mann. The contract date was May 15, 2024. Vanbarton Group took title to the building from Prodigy and Shorewood in 2021 with a transfer valuation of $83 million.

Crain’s reported on the new sale yesterday. Housing Solutions is a property management firm located at 444 Madison Avenue and is not affiliated with the nonprofit Housing Solutions of New York. The buyers divided the property into a fee owner position and a master leaseholder. The fee owner company is at the office of the Brooklyn law firm Breuer Herskowitz LLP while the master lease holder is at the office of Housing Solutions.

Prior sales and revenue

Prior to this transaction, PincusCo has records that a buyer registered with Breuer Herskowitz purchased an Upper West Side hotel in one transaction for a total of $21 million and has no record it sold any properties over the past 24 months.
The seller Vanbarton Group purchased one property in one transaction for a total of $3 million and sold 32 properties in three transactions for a total of $564.2 million over the same time period. The former owner according to the Department of Housing Preservation and Development is Justin Kleinman, head officer. The business entity is 17 John Street Property Owner Llc.

The property

The hotel building in Financial District has 111,423 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 77 feet and is 135 feet deep with a total lot size of 10,060 square feet. The lot is irregular. The zoning is C5-5 which allows for up to 15 times floor area ratio (FAR) for commercial and up to 10 times FAR for residential with inclusionary housing. The city-designated market value for the property in 2022 is $25.9 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 $8,280 in OATH penalties in the last year.

Development

For the tax lot building, it received its initial renovation certificate of occupancy on May 31, 2018. On the lot, there is one active major alteration construction project, 122420193, for a 79-unit, 107,903 square-foot R-1 building. The project was submitted by Larry Davis with plans filed June 1, 2015 and permitted January 10, 2017.

The neighborhood

In Financial District, The majority, or 74 percent of the 79.9 million square feet of commercial built space are office buildings, with elevator buildings next occupying 15 percent of the space. In sales, Financial District has the 4th highest sale turnover among other neighborhoods in the city with $2.5 billion in sales volume in the last two years. For development, Financial District is the 3rd most active neighborhood among other neighborhoods. It had 9.4 million square feet of commercial and multi-family construction under development in the last two years, which represents 12 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of two of the nine commercial properties representing 20,179 square feet of the 330,236 square feet. The two identified owners are Maverick Management and Niarchos Family.
On the tax block, there was one new building construction project filed totaling 119,758 square feet. It is a 119,758 square-foot business (B) building submitted by Hidrock Properties and filed by Eddie Hidary with plans filed April 4, 2019 and it has not been permitted yet.

The majority, or 50 percent of the 330,236 square feet of built space are specialty buildings, with hotel buildings next occupying 34 percent of the space.

The seller

The PincusCo database currently indicates that Vanbarton Group owned at least 19 commercial properties with 474 residential units in New York City with 2,391,248 square feet and a city-determined market value of $871.9 million. (Market value is typically about 50% of actual value.) The portfolio has $1.4 billion in debt, with top three lenders as Blackstone Group, Blackstone Mortgage Trust, and New York Life Insurance Company respectively. Within the portfolio, the bulk, or 70 percent of the 2,391,248 square feet of built space are office properties, with elevator properties next occupying 17 percent of the space. The bulk, or 93 percent of the built space, is in Manhattan, with Bronx next at 7 percent of the space.

The buyer

The PincusCo database currently indicates that Breuer Herskowitz Registered owned at least one commercial property with 83 residential units in New York City with 109,290 square feet and a city-determined market value of $22.6 million. (Market value is typically about 50% of actual value.) The portfolio consists of at least a single hotel property. It is located in Manhattan.

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