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Midtown Real Estate Firm Centurion Realty Buys Two Soho Rental Buildings for $62M

Centurion Realty, a Midtown-based family-owned real estate management and development firm, has scooped up two apartment buildings in Soho from Joseph Nabavi’s Direct Management Corp. for $62 million.

The sale of the contiguous buildings at 68-72 Thompson Street between Spring and Broome Streets closed on Dec. 28, 2017, according to public records published today. 

The six-story buildings comprise a total of nearly 36,000 square feet and 72 rental units, according to public data. Both were constructed around the turn of the 19th century.

As a result of renovation about three years ago, the buildings feature elevators, fitness room, laundry room and rooftop terrace. Within the units, there are hardwood floors and high ceilings, according to a description on StreetEasy. The units are primarily a mix of one- and two-bedrooms.

Ralph Tawil, a principal at Centurion, did not immediately return to a request for comment, nor did anyone at Direct Management Corp.

Source: commercial

After Settling Airbnb Suit, Salim Assa Sells West 55th Street Building for $50M

Fresh off a $1.2 million settlement with the city for alleged illegal Airbnb rentals, landlord Salim Assa has sold one of his Midtown residential buildings for $50 million, Commercial Observer has learned.

Assa Properties has unloaded 19 West 55th Street to Abraham Leifer of Aview Equities in a sale that closed last week, according to a press release provided first to CO from Assa’s firm. The fully leased, nine-story building between Fifth Avenue and Avenue of the Americas has 7,600 square feet of retail space and 23 rental apartments that include both market-rate and stabilized units.

Meanwhile, the beleaguered developer will hold onto 15 West 55th Street, the attached residential property next door anchored by Italian fashion designer Domenico Vacca’s clothing boutique. The two buildings together used to be known as “The Branson,” a pair of rent-stabilized properties that Assa acquired for $60 million in 2013. He then revamped both buildings for $18 million and leased the 14,600-square-foot retail space at 15 West 55th to Vacca.

photography limo douglaselliman photography 33479563 limo After Settling Airbnb Suit, Salim Assa Sells West 55th Street Building for $50M
A renovated kitchen at 19 West 55th Street. Photo: Douglas Elliman

The release claims that the properties were “only 25 percent occupied” when Assa acquired them but are now “substantially leased.”

The sale isn’t related to the settlement, according to Assa’s spokespeople. As part of the deal he struck with city a day ago, Assa is required to hire property managers to oversee 15-19 West 55th Streets as well as two other buildings in Hell’s Kitchen. But the new owners of No. 19 will be exempt from that rule.

“Since we purchased this portfolio, Assa Properties has made the investment to bring the properties to their current first-class state, matching the premium location in the center of Fifth Avenue’s luxury retail corridor,” Assa said in a statement. “We’re thrilled to offer this prime opportunity with 19 West 55th Street.”

Source: commercial

Super Fi Emporium Opening Second East Harlem Supermarket

Super Fi Emporium is opening its second full-service supermarket in East Harlem, Commercial Observer has learned, after spending $10 million on a commercial unit yesterday.

The new market will span the entire 12,750 square feet of ground-floor retail space at HAP Investment’s new 2211 Third Avenue at the corner of East 121st Street. The market is participating in the city’s Food Retail Expansion to Support Health, or FRESH, program that provides savings to owners and increases the availability of affordable, healthy food options in areas of high need.

“We are thrilled to be the retail tenant at 2211 Third Avenue,” Anthony Reynoso, one of the owners of SuperFi Emporium, said in a statement. “2211 Third Avenue is a great addition to the area, and we look forward to being the go-to supermarket for the tenant community as well as the rest of the East Harlem neighborhood.”

Super Fi has a location 1635 Lexington Avenue between East 103rd and East 104th Streets which it reopened in June 2013, also via the FRESH program.

Douglas Elliman Faith Hope Consolo and Arthur Maglio represented both sides in the deal, and is working on another deal for Super Fi Emporium in Harlem. “They believe in Harlem,” Consolo said. “For East Harlem, this is a nice push. Harlem needs the same options in food that is all over the city.” The new market will open in spring 2018.

HAP hosted a ribbon cutting and opening ceremony for the completion of the 108-unit building, known as Hap Ten, on Nov. 7. It was designed by Fischer + Makooi Architects.

“With the addition of SuperFi Emporium, we are certain the building will be the most sought after rental destination in East Harlem,” Eran Polack, the chief executive officer of HAP Investments, said in a prepared statement.

Monthly residential rents at 2211 Third Avenue range from $2,100 for a studio to $3,750 for a two-bedroom, according to information provided by HAP. The building features doormen, elevator, fitness center, roof-deck, terraces, private storage, bike room, on-site parking and in-unit washers/dryers.

“This is a win-win for Harlem and it’s a win-win for [Super Fi],” Consolo said. “And it’s a wonderful amenity for the building.”

HAP Investments acquired 2211 Third Avenue, 214 East 121st Street and 216 East 121st Street from Tahl-Propp Equities in May 2014 for $13 million, according to property records.

Source: commercial

RFR Sells Tribeca Loft Conversion to Iliad Realty Group for $55M

Aby Rosen’s RFR Realty has unloaded a nine-story, mixed-use loft building at 67 Vestry Street in Tribeca to Iliad Realty Group for $55.5 million, city public records show. The sale closed last Wednesday.

The second through ninth floors of the 61,250-square-foot former warehouse are divided into 25 apartments, according to marketing materials from Cushman & Wakefield. Of the 25 loft units, a few are still occupied by rent-stabilized tenants, but the majority are vacant, according to C&W’s Robert Knakal, who helped broker the sale. Fourteen units are rent stabilized, according to the most recent property tax bill. The property also has 7,000 square feet of vacant ground-floor retail, the brochure from C&W notes.

RFR purchased the building for $16.5 million in 2005, property records indicate. The company filed plans to build an 11-story, 42-unit residential building on the site in 2014. However, it looks like the developer abandoned the project after 67 Vestry’s stabilized residents fought the development plans and attempted to get the building landmarked. A spokeswoman for RFR declined to comment on the sale, and Iliad didn’t immediately return a request for comment.

Knakal along with C&W’s Will Suarez and Jon Hageman represented the buyer and the seller in the deal.

“I think this was a transaction that was good for the buyer and the seller, and the site has tremendous potential,” Knakal said. “It’s an excellent location and there’s tremendous upside on that property.”

Iliad also took out a $40 million mortgage from Apollo Commercial Real Estate Finance, according to public records.

Source: commercial

Selling a Problematic Property? Ten-X Has the Answer

Jay Lucas, a senior director at Cushman & Wakefield in Dallas, was tasked with selling a 60,000-square-foot office building that his client had on the market for more than five years.

“The property became tired,” he says. “The ownership either didn’t have the capital or didn’t want to do renovations and update the property. So, trying to position the property to achieve its potential value, was difficult to do.”

To meet the challenge, Lucas turned to Ten-X Commercial, the nation’s leading online real estate marketplace, which has facilitated the sale of over $50 billion in real estate.

Ten-X, which has transacted over 300,000 properties in the U.S., allows brokers to supercharge the sales process with deals that close twice as quickly as the average commercial real estate transaction.

By leveraging Ten-X Commercial, Lucas was able to sell the property for his client in less than four months, for over $4 million. “It was like I’d called Santa Claus,” he says. “It was perfect.”

With its vast reach in the real estate market, Ten-X exposed the property to a global set of buyers. Lucas’ client suddenly had interest from a variety of markets and, in a sign of Ten-X’s value to sellers, sold the building to an unknown buyer in its own market.

“We had never met. We knew nothing about them,” he says. “The property had a financing contingency, or it probably would have sold in 90 days. It worked out great.”

After closing this transaction, Lucas was a believer in the Ten-X platform. He used the marketplace to sell three buildings in Dallas, totaling approximately 250,000 square-feet. He began working on the deal this past March and, using Ten-X Commercial’s Offer Select transaction solution, closed the deal six month later for more than $12 million.

This time, Ten-X was part of his marketing strategy from the get-go.

“I told my client, this is the way to go—here’s what we’ll do, and here’s why it works,” he says. “They were thrilled with it. We had a lot of buyers come through, and my seller was thrilled with the whole process.”

Currently, Lucas has another deal in the works on Ten-X Commercial, and another he’s just getting off the ground.

After selling real estate for 38 years, Lucas knows the potential buyers in his market well. But Ten-X is now a key aspect of his sales process for its ability to help him identify buyers even he hadn’t come across before.

“With all my experience, there’s lots of people I know. But we don’t know everybody,” he says. “Ten-X’s online marketplace brings in so many potential buyers from around the world. Once a buyer shows an interest in a specific property or property type, Ten-X curates and matches similar properties a buyer might be interested in. That’s a major advantage to us. Plus, when somebody goes into the Ten-X platform and registers interest in a property, I know who they are, and I know how to contact them immediately.”

The most exciting part of using Ten-X Commercial for Lucas, though, comes in real time, during the bidding process with the Live Bid transaction solution.

“When you’re on the phone with the Ten-X team and potential buyers are bidding live—and the seller can see it—it’s an exciting and intense moment,” he says.

“When you hit the reserve and you start getting incremental bids above that, your seller is just grinning so big. They’re just like, ‘This worked.’ ”

Source: commercial

ShopOne Centers REIT Buys NJ Mall for $26M Cash

Real estate investment trust ShopOne Centers REIT has paid $26.5 million for a shopping center in South Plainfield, N.J., Commercial Observer can exclusively report.

The cash purchase of the 140,000-square-foot mall was made possible by a new credit facility that ShopOne obtained from KeyBanc Capital Markets in November, according to Michael Carroll, the REIT’s chief executive officer. Last month, CO reported that the credit would be used both to replace existing debt and to acquire new shopping centers.

The latest purchase, Oak Park Commons, at 913 Oak Tree Avenue, is 98 percent occupied with 22 tenants, anchored by an outlet of supermarket chain Acme Markets. The shopping center, which appears to have been previously owned by Pennsylvania-based WP Realty, also hosts a CVS, a McDonald’s and two automotive stores.

WP Realty did not immediately return a request for comment.

“The purchase of Oak Park Commons aligns with our strategy of acquiring well-located shopping centers in densely populated, fundamentally strong markets across the country,” Carroll said in a statement. “This property is particularly attractive considering its prime position in a major transportation corridor and the opportunity to unlock incremental value through operational and capital improvements.”

In an uncertain moment for retail, New York City-based ShopOne touted the favorable demographics of the community surrounding Oak Park. South Plainfield, 25 miles southwest of Downtown Manhattan, boasted a median household income of nearly $92,000 in 2016, according to U.S. Census data. Retail sales per capita in the town topped $20,000 in 2012, the most recent year for which data are available.

“There is strong demand from tenants for strong, well-located shopping centers,” Carroll wrote in an email to CO. “The center features everyday necessity goods and services including grocery, drug, banking, restaurants and medical.”

Source: commercial

Partnership Agreements and LLC Operating Agreements Need to Be Amended Now!

Effective Jan. 1, 2018, the IRS changed its audit rules as they relate to any entity taxed as a partnership.

Under the new rules, the concept of Tax Matters Partner (TMP) no longer exists. The IRS has created a Partnership Representative (PR).

A PR does not need to be a partner or member of the entity and can be anyone the entity chooses, as long as the individual has a substantial presence in the U.S. and the capacity to act on behalf of the partnership. If an entity is chosen as the PR, the partnership must choose an individual with a substantial U.S. presence to act on behalf of such entity and therefore the partnership.

Many, if not most, partnerships will be subject to the new audit rules. Possible exceptions may include instances where the partnership only has individuals, C-Corporations, eligible foreign entities, S-Corporations or an estate (only for 2 years) as its partners and has fewer than 100 partners. When counting the number of partners, if the partnership has an S-Corporation as a partner, then the S-Corporation counts as 1 partner, and the number of shareholders it has counts as additional partners. Should a shareholder of the S-Corporation not be an individual then the partnership will be subject to the new audit rules.

“This change should inspire substantial review and revision to partnership agreements,” says Marc Wieder, Partner and Real Estate Group co-Leader at Anchin, Block & Anchin LLP. “It applies to partnerships as well as LLCs that are taxed as partnerships.”

What are the new audit rules?

The key and most important change is that now the PR will bind the partnership when agreeing to any settlement of adjustment with the IRS. No longer will the IRS deal with multiple individual partners. In addition, any adjustment the IRS makes is an adjustment to the partnership and is the partnership’s liability and obligation to make the payment.

Things to consider when amending your agreements:

  1. Selection and replacement of your PR
  2. Indemnification of the PR
  3. Scope of PR’s authority
  4. How to deal with former partners that were partners in the year under audit

“There are clearly many factors to consider when selecting the PR,” Wieder explains. “Since the PR can bind all partners, some factors could include which partner has the largest holdings (and thus the most incentive to try to settle for as little as possible) or has the best understanding of tax law.” Whether choosing a partner or an outside advisor, it is likely that the new PR will want to include some provisions in the partnership agreement to indemnify them in the event that other partners are dissatisfied. The other partners may also want to revise the partnership agreement to require that a process be carried out, such as a meeting of the partners, in the event of a challenge from the IRS.

While this serves as an overview of the changes, it is best to consult with your accountant and attorney to determine all the decisions and amendments that need to be made to your agreement. Do not wait!

Source: commercial

Doheny Eye Institute Buys $50M LA County Building for New HQ

The Doheny Eye Institute has shelled out $50 million for a four-story, 123,203-square-foot office property in Pasadena, Calif., within the county of Los Angeles, the Commercial Observer has learned. The building at 150 North Orange Grove Boulevard, situated on a seven-acre parcel, will serve as the new headquarters for the 250-member staff of the renowned eye-research institute as part of its newly cemented partnership with the University of California, Los Angeles and its renowned Jules Stein Eye Institute.

Currently, the institute is headquartered at 1355 San Pablo Street in a 75,589-square-foot building they own and had built in 1974 on the County-USC Medical Campus in Boyle Heights. They will remain there until the relocation is complete. That will take place in stages over the next two years, Christopher C. Conway, chief of development and public affairs for Doheny, told Commercial Observer.

Bill Boyd, Linda Lee and Scott Unger of the Glendale branch of the Charles Dunn Company represented Doheny. The search started two-and-a-half years ago. They considered 81 options in a search that included the West San Gabriel Valley,” Boyd, a senior managing director with Charles Dunn Company, said.

The seller of the building on Orange Grove was SteelWave, John McAniff, a managing director with JLL’s downtown Los Angeles office, represented SteelWave in the deal. McAniff did not respond to a request for comment.

SteelWave acquired the property in late 2013 from Avery Dennison for $17 million, according to public records. The label-maker had owned and occupied the building since its 1981 completion. SteelWave embarked on a $10 million renovation of the asset that included a refurbishment of the elevators, restrooms and mechanical systems, and added more usable square footage to the building Boyd said. Following the sale, Avery Dennison leased the property from SteelWave for about a year before relocating to approximately 60,000 square feet at 207 Goode Avenue  in nearby Glendale, an approximately 190,000-square-foot multi-tenant office building along the Ventura 134 freeway. Tenants at the building on Goode Avenue include Equinox Glendale and Whole Foods’ corporate.

A key selling point for Doheny, Conway said, was the building’s proximity to biomedical organizations including the Huntington Memorial Hospital and other leading institutions such as the California Institute of Technology that make up a growing biotech corridor in the city.

“The facility was such a jewel in the crown,” Conway said. “I practically got on the ground and kissed the soil when I visited for so many reasons, but one of them being the magnificent location, right in the heart of Pasadena, right by Old Town and on Orange Grove, which is the premier artery in the community, next door to the Norton Simon Museum and Pasadena Historical Society.”

The institute has plans for $20 million in upgrades to the property to better serve its research and clinical needs.

“We compete for the top researchers in the world,” he said. “The location and the quality of our facilities is a huge deciding factor for people. Pasadena is one of the most beautiful neighborhoods in this country then you have this gorgeous facility that is basically located in a park,” he added.

Source: commercial

Newmark Knight Frank Completes $290M Sale of DreamWorks Animation Headquarters

Newmark Knight Frank completed the $290 million sale of DreamWorks Animation’s Headquarters and Studio Campus, a 460,000-square-foot creative office campus in Glendale, CA, Commercial Observer has learned. The property is 100 percent triple-net leased through 2035 to DreamWorks Animation SKG, Inc., a wholly-owned subsidiary of

NKF’s Capital Markets President, West Coast Kevin Shannon, Executive Managing Director Ken White and Managing Director Laura Stumm, represented the seller, the GC Net Lease (Glendale) Investors, LLC, an entity of Griffin Capital Company, LLC., a privately held, Los Angeles-headquartered investment and asset management company.

Griffin Capital acquired the property in July 2015 for $215 million prior to the acquisition of DreamWorks by Comcast Corporation in August 2016. The buyer, LA Hana OW, LLC, an entity of Seoul-based Hana Asset Management and Los Angeles-headquartered Ocean West, was self-represented.

NKF Capital Executive Managing Director David Milestone and Managing Director Brett Green arranged the financing on behalf of the buyer.

Hana Asset Management Co., Ltd., the largest financial group in Korea, and Ocean West partnered earlier this year to buy the NASA headquarters at Two Independence Square in Washington, D.C. in a deal valued at nearly $360 million in July.

“Asian capital loves the gateway markets of Seattle, San Francisco and Los Angeles. A big Korean company making a big bet in Los Angeles is further evidence of that trend.,” Shannon told CO. “Content creation in entertainment are huge in LA and so studios have gotten very popular. Capital loves that story right now. Capital loves that script.”

The appeal of a long-term single tenant in a lease deal of its size — a rarity in the LA market —was also part of the draw according to Shannon.

“You’ve got a low interest rate environment, you’ve got capital that wants to be in gateway markets, you’ve got an entertainment studio asset, it all came together and it was an exciting execution. Those trends are all good for selling product right now.”

Built in 1997 and situated on approximately 15 acres at 1000 Flower Street, the iconic DreamWorks Animation Studios includes five buildings. The Mediterranean-styled campus features landscaped courtyards, a manmade river, library, fitness center, and screening room, among other amenities.

DreamWorks Animation Studios, located within the Media District, is home to a concentration of major studio production headquarters, entertainment and media focused companies including Disney/ABC and Warner Bros.

Source: commercial

Two-Building W’Burg Rental Lists For $80M, a Year After its Completion

Grand Street Development is putting the Brooklyn Grand, a two-building rental and retail development in Williamsburg, up for sale for $80 million, according to information provided by Meridian Investment Sales.

The buildings at 774 Grand Street and 213 Maujer Street, which combine for 80,048 square feet, comprises 71 rental units and 10,717 square feet of ground floor retail. The properties were completed last year and are fully rented.

The development sports an underground garage with 19 spaces, a gym, a garden and a roof deck featuring an outdoor kitchen and hammocks. And the properties features a red brick facade, loft-style windows, exposed cement ceilings and modern finishes.

The developer, led by Founder and Chief Executive Officer Dean Marchi, has been getting a ton of unsolicited offers for the building, so he decided to market it for sale, according to Meridian.

“Distinct, boutique residential buildings rarely come available in Brooklyn, let alone ones featuring the character, amenities and the highly sought after neighborhood that Brooklyn Grand offers,” Meridian’s David Schechtman said in a prepared statement. “The property’s location among Williamsburg’s sleek boutiques, craft coffee shops and dining destinations will ensure its desirability for years to come.”

The 74,172-square-foot 774 Grand Street benefits from a 25-year 421-a tax abatement, and 20 percent of its 64 units are affordable. It mostly comprises one- and two-bedroom units, but also has some studios. Smaller units start in the mid-$2,000s per month and the larger two-bedroom units can cost upwards of $4,000 a month, according to StreetEasy.

At 213 Maujer Street, a much smaller four-story, 5,876-square-foot building, there is one studio unit and six one-bedroom apartments. The studio has rented in the mid-$2,000s per month and the one-bedroom units in the low $3,000s per month, according to StreetEasy.

Source: commercial