AYA pays $7.9M to Barry Leon for two walkups in Kips Bay

Co-living company AYA paid $7.9 million to developer Barry Leon for two Kips Bay residential buildings.

The purchase, which includes the midblock 19-unit residential elevator building at 239 East 33rd Street and 10-unit residential walkup building at 237 East 33rd Street in Kips Bay, Manhattan is the latest acquisition for the short-term rental company. In February, AYA paid Sackman Enterprises $14.9 million for the 25-unit residential elevator building at 240 East 90th Street in Yorkville.

In a comment to PincusCo, co-founder Amir Shriki clarified that both of the company’s recent purchases are “for the purpose of long term rentals”. Shriki says the company plans to hold the properties for 10 years or more.

The latest deal closed on February 18, 2022 and was recorded on March 4, 2022.

Shriki was signatory for AYA through the entity Sparton E33 LLC.

The two properties have 16,077 square feet of built space and 4,359 square feet of additional air rights for a total buildable of 20,440 square feet according to PincusCo analysis of city data. The sale price per built square foot is $491 and the price per buildable square foot is $386 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.)

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 237 East 33rd Street.

Prior sales and revenue

Prior to this transaction, Pincusco has records that the buyer AYA purchased one properties in one transactions for a total of $14.9 million and has no record it sold any properties over the past 24 months.

The seller Barry Leon had not purchased any other properties and sold five properties in one transactions for a total of $4.6 million over the same time period. The former owners according to the Department of Housing Preservation and Development includes Barry Leon, head officer and Jesse Leon, officer. The business entity is 237-9 Owners Llc. The two properties with a total of 16,077 square feet of built space generated revenue of $731,919 per year or $46 per square foot. The sale price per square foot was $491.

The property

The 237 East 33rd Street parcel has frontage of 18 feet and is 98 feet deep with a total lot size of 1,819 square feet. The zoning is R8B which allows for up to 4 times floor area ratio (FAR) for residential. The city-designated market value for the property in 2022 is $3.7 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 received $450 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 Kips Bay, the majority, or 56 percent of the 26.9 million square feet of built space are residential elevator buildings, with specialty buildings next occupying 29 percent of the space. In sales, Kips Bay has 2.5 times the average sales volume among other neighborhoods with $688.3 million in sales volume in the last two years and is the 17th highest in Manhattan. For development, Kips Bay has had very little major development activity relative to other neighborhoods.It had 624,586 square feet of commercial and multi-family construction under development in the last two years, which represents 2 percent of the neighborhood’s built space. There were four pre-foreclosure suits filed among other residential walkup buildings in the past 12 months.

The block

On the tax block of 237 East 33rd Street, PincusCo has identified the owners of 12 of the 33 commercial properties representing 669,087 square feet of the 972,191 square feet. The largest owner is Hakim Organization, followed by Slate Property Group and then Donald Zweibon. There are three active new building construction projects totaling 218,228 square feet. The largest is a 144-unit, 134,998-square-foot R-2 building developed by Xiaocheng Zhou with plans filed May 2, 2019 and permitted June 11, 2020. The second largest is a 32-unit, 57,901-square-foot R-2 building developed by Asher Schepansky with plans filed July 20, 2016 and it has not been permitted yet.

the majority, or 81 percent of the 972,191 square feet of built space are residential elevator buildings, with residential walkup buildings next occupying 14 percent of the space.

The seller

The PincusCo database currently indicates that Barry Leon owned at least two commercial properties with 73,631 square feet and a city-determined market value of $8.5 million. (Market value is typically about 50% of actual value.) The portfolio has $49.4 million in debt, borrowed from Fort Amsterdam Capital and Popular Bank. Within the portfolio, all identified are residential elevator properties. The bulk, or 86 percent of the built space, is in Brooklyn, with Queens next at 14 percent of the space.

The buyer

The PincusCo database currently indicates that AYA owned at least one commercial property with 21,000 square feet and a city-determined market value of $6.7 million. (Market value is typically about 50% of actual value.) The portfolio consists of at least a single residential elevator property. It is located in Manhattan.

Surrounding

Within a 400-foot radius of 237 East 33rd Street, PincusCo identified 11 commercial real estate items of interests occurred over the past 24 months.
Of those 11 items, one was in new building development. It was a new building permit issued on March 30, 2021 for a 22,076-square-foot R-2 building with 30 residential units at 609 Second Avenue.
Of those 11 items, two were sales above $5 million totaling $13.5 million. The most recent of the two was Kabbalah Centre which bought the 4,941-square-foot, two-unit two-family building (B1) on 247 East 32nd Street for $6 million from Sarah Von der Ahe on August 2, 2021.
Of those 11 items, eight were loans above $5 million totaling $155.4 million. The most recent of the eight was Slate Property Group which borrowed $22.2 million from Signature Bank secured by the 6,980-square-foot, five-unit mixed-use building (S4) on 493 3rd Avenue and two other properties on January 6, 2022.

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