Yechiel Newhouse pays $22.5M to Sharp Management for residential elevator in Morris Heights

Yechiel Newhouse through the entity Hp 1514 Sedgwick Housing Development Fund Co, Inc paid $22.5 million to Sharp Management through the entity Hp 1514 Sedgwick Housing Development Fund Co, Inc for the 96-unit residential elevator building at 1514 Sedgwick Avenue in Morris Heights, Bronx.
The deal closed on April 28, 2022 and was recorded on May 11, 2022. The property has 94,430 square feet of built space according to PincusCo analysis of city data. The sale price per built square foot is $238 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 30, 2015, for $21.6 million. The signatory for Sharp Management was Martin Kirzner. The signatory for Yechiel Newhouse was Yechiel Newhouse.

Prior sales and revenue

Prior to this transaction, Pincusco has records that the buyer Yechiel Newhouse purchased four properties in four transactions for a total of $84.7 million and has no record it sold any properties over the past 24 months.
The seller Sharp Management had not purchased any other properties and sold 11 properties in eight transactions for a total of $67.8 million over the same time period. The former owners according to the Department of Housing Preservation and Development includes Martin Kirzner, head officer and Michael Black, site manager. The business entity is Sedgwick Riverview Lp. The 94,430-square-foot property generated revenue of $1.9 million or $20 per square foot, according to the most recent income and expense figures.

The property

The 1514 Sedgwick Avenue parcel has frontage of 180 feet and is 140 feet deep with a total lot size of 25,360 square feet. The lot is irregular. The zoning is R7-1 which allows for up to 3.44 times floor area ratio (FAR) for residential. The property has a 421A exemption that started in 2008.0 and expires in 2033.0. The city-designated market value for the property in 2022 is $7.4 million.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the property since September of 2020. In addition, according to city public data, the property has received 21 housing violations and $3,000 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 $5 million on this tax lot.

The neighborhood

In Morris Heights, the majority, or 61 percent of the 17.8 million square feet of commercial built space are residential elevator buildings, with residential walkup buildings next occupying 18 percent of the space. In sales, Morris Heights has near average sales volume among other neighborhoods with $244.6 million in sales volume in the last two years and is the 3rd highest in Bronx. For development, Morris Heights has 1.5 times the average amount of major developments relative to other neighborhoods and is the 6th highest in Bronx. It had 1.4 million square feet of commercial and multi-family construction under development in the last two years, which represents 8 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of nine of the 22 commercial properties representing 995,707 square feet of the 1,620,768 square feet. The largest owner is Hudson Valley Property Group, followed by Labe Twerski and then Stellar Management. There are three active new building construction projects totaling 76,177 square feet. The largest is a 66-unit, 43,688-square-foot R-2 building developed by Jay Martino with plans filed April 1, 2020 and it has not been permitted yet. The second largest is a 39-unit, 26,473-square-foot R-2 building developed by Ozzie Fried with plans filed September 17, 2018 and permitted May 28, 2021.

The majority, or 92 percent of the 1.8 million square feet of built space are residential elevator buildings, with 1-4 family buildings next occupying 8 percent of the space.

The seller

The PincusCo database currently indicates that Sharp Management owned at least 31 commercial properties with 668,937 square feet and a city-determined market value of $47.7 million. (Market value is typically about 50% of actual value.) The portfolio has $50.5 million in debt, with top three lenders as New York Community Bank, Signature Bank, and LMF Commercial respectively. Within the portfolio, the bulk, or 62 percent of the 668,937 square feet of built space are residential walkup properties, with residential elevator properties next occupying 34 percent of the space. The bulk, or 64 percent of the built space, is in Bronx, with Manhattan next at 28 percent of the space.

The buyer

The PincusCo database currently indicates that Yechiel Newhouse owned at least 36 commercial properties with 1,083,982 square feet and a city-determined market value of $75.7 million. (Market value is typically about 50% of actual value.) The portfolio has $161.9 million in debt, with top three lenders as New York Community Bank, Santander Bank, and Investors Bank respectively. Within the portfolio, the bulk, or 56 percent of the 1,083,982 square feet of built space are residential elevator properties, with residential walkup properties next occupying 44 percent of the space. The bulk, or 61 percent of the built space, is in Bronx, with Manhattan next at 39 percent of the space.

Surrounding

Within a 400-foot radius of 1514 Sedgwick Avenue, PincusCo identified three commercial real estate items of interests occurred over the past 24 months.
Of those three items, one was in new building development. It was a new building permit issued on May 28, 2021 for a 26,473-square-foot R-2 building with 39 residential units at 1526 Sedgwick Avenue.
Of those three items, two were loans above $5 million totaling $18.9 million. The most recent of the two was Ezriel Weinberger which borrowed $8.7 million from Capital One secured by the 0-square-foot development site (V0) on Undercliff Avenue and one other property on July 16, 2021.

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