ZHL Group pays $14M to Shalimar Management for two properties in Hell’s Kitchen

ZHL Group through the entity 350 West 44 LLC paid $14 million to Shalimar Management through the entity 100 Varick Realty LLC for midblock industrial building at 348-350 West 44th Street in Hell’s Kitchen, Manhattan and midblock office building at 346 West 44th Street in Hell’s Kitchen, Manhattan.
The deal closed on March 4, 2022 and was recorded on March 24, 2022. The two properties have 10,760 square feet of built space and 34,415 square feet of additional air rights for a total buildable of 45,210 square feet according to PincusCo analysis of city data. The sale price per built square foot is $1,301 and the price per buildable square foot is $309 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 Shalimar Management was Barbara Hellman. The signatory for ZHL Group was Yevgeniy Lvovskiy. Yevgeniy Lvovskiy is the CEO of ZHL Group, located at the same address as the buyer LLC.

Because multiple properties have been transacted, some of the following sections will follow the property with the largest assessed value, which in this case, is the property on 348-350 West 44th Street.

Prior sales and revenue

Prior to this transaction, PincusCo has no record that the buyer ZHL Group had purchased any other properties and has no record it sold any properties over the past 24 months.
The seller Shalimar Management had not purchased any other properties and had not sold any properties over the same time period. The two properties with a total of 10,760 square feet of built space generated revenue of $605,884 per year or $56 per square foot. The sale price per square foot was $1,301.

The property

The 348-350 West 44th Street parcel has frontage of 50 feet and is 100 feet deep with a total lot size of 5,000 square feet. The zoning is C6-2 which allows for up to 6 times floor area ratio (FAR) for commercial and up to 6.02 times FAR for residential. The city-designated market value for the property in 2022 is $2 million.

Violations and lawsuits

The properties were not involved in any lawsuits or bankruptcies in the past years. 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 $5 million on this tax lot.

The neighborhood

In Hell’s Kitchen, the bulk, or 39 percent of the 45 million square feet of commercial built space are residential elevator buildings, with specialty buildings next occupying 17 percent of the space. In sales, Hell’s Kitchen has 3.5 times the average sales volume among other neighborhoods with $972.1 million in sales volume in the last two years and is the 13th highest in Manhattan. For development, Hell’s Kitchen has 1.3 times the average amount of major developments relative to other neighborhoods and is the 18th 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 3 percent of the neighborhood’s built space. There were four pre-foreclosure suit filed among other industrial buildings in the past 12 months.

The block

On the tax block of 348-350 West 44th Street, PincusCo has identified the owners of six of the 29 commercial properties representing 133,734 square feet of the 1,050,526 square feet. The largest owner is McSam Hotel Group, followed by Acuity Capital Partners and then the Gottesman family. There is one active new building construction project totaling 35,225 square feet. It is a 114-unit, 35,225-square-foot R-1 building developed by Sam Chang with plans filed November 26, 2014 and permitted December 7, 2015.

The majority, or 53 percent of the 920,236 square feet of built space are hotel buildings, with office buildings next occupying 19 percent of the space.

The buyer

The PincusCo database currently indicates that ZHL Group owned at least one commercial property with 26,032 square feet and a city-determined market value of $954,000. (Market value is typically about 50% of actual value.) The portfolio has $8.5 million in debt, borrowed from JPMorgan Chase. The portfolio consists of at least a single office property. It is located in Bronx.

Surrounding

Within a 400-foot radius of 348-350 West 44th Street, Pincusco identified nine commercial real estate items of interests occurred over the past 24 months.
Of those nine items, one was for major renovation including a certificate of occupancy change. It was an initial temporary certificate of occupancy issued on August 18, 2020 for the $600,000 renovation of zero-square-foot S-2 building with N/A residential units at 332 West 44th Street.
Of those nine items, three were sales above $5 million totaling $1.7 billion. The most recent of the three was Gottesman family which bought the 0-square-foot, one-unit industrial (G1) on 330 West 44th Street and 27 other properties for $1.6 billion from Gottesman family on March 9, 2021.
Of those nine items, five were loans above $5 million totaling $380.1 million. The most recent of the five was McSam Hotel Group which borrowed $24.6 million from Sterling National Bank secured by the 35,420-square-foot, one-unit hotel (H2) on 324 West 44th Street on March 2, 2022.

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