Peak Capital pays $11.7M for two walkup properties in Carnegie Hill

Peak Capital Advisors through the entity 89 Owner LLC paid $11.7 million to Ip Wing Kong and Yuet Tong Kong through the entity 108 Charlton Street Realty, Inc. for midblock 14-unit residential walkup building at 161 East 89th Street in Carnegie Hill, Manhattan and midblock 12-unit residential walkup building at 163 East 89th Street in Carnegie Hill, Manhattan.
The deal closed on March 17, 2022 and was recorded on April 20, 2022.

The two properties have 19,710 square feet of built space and 402 square feet of additional air rights for a total buildable of 20,136 square feet according to PincusCo analysis of city data. The sale price per built square foot is $591 and the price per buildable 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.)
The signatory for Ip Wing Kong and Yuet Tong Kong was Ip Wing Kong and Yuet Tong Kong. The signatory for Peak Capital Advisors was Alex Rabin.

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 161 East 89th Street.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer Peak Capital Advisors purchased seven properties in seven transactions for a total of $30.5 million and has no record it sold any properties over the past 24 months.
The seller Ip Wing Kong had not purchased any other properties and had not sold any properties over the same time period. The former owners according to the Department of Housing Preservation and Development includes Yuet Kong, head officer and Diana Guertero Orantes, site manager. The business entities are Dgo Management Consulting and 108 Charlton Street Realty, Inc.

The property

The 161 East 89th Street parcel has frontage of 25 feet and is 100 feet deep with a total lot size of 2,517 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 $3.1 million.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the properties since September of 2020. In addition, according to city public data, the properties have received $50 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 Carnegie Hill, the majority, or 76 percent of the 38.3 million square feet of commercial built space are residential elevator buildings, with specialty buildings next occupying 9 percent of the space. In sales, Carnegie Hill has 3 times the average sales volume among other neighborhoods with $817.3 million in sales volume in the last two years and is the 14th highest in Manhattan. For development, Carnegie Hill has had very little major development activity relative to other neighborhoods.It had 709,333 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.

The block

On the tax block of 161 East 89th Street, PincusCo has identified the owners of eight of the 24 commercial properties representing 185,300 square feet of the 484,311 square feet. The largest owner is Caiola Family, followed by John Young and then Zare Balassanian. There are no active new building construction projects on this tax block.

The majority, or 81 percent of the 1 million square feet of built space are residential elevator buildings, with residential walkup buildings next occupying 14 percent of the space.

The buyer

The PincusCo database currently indicates that Peak Capital Advisors owned at least eight commercial properties with 73,671 square feet and a city-determined market value of $20.6 million. (Market value is typically about 50% of actual value.) The portfolio has $20.1 million in debt, borrowed from Walker & Dunlop and IberiaBank. Within the portfolio, the bulk, or 83 percent of the 73,671 square feet of built space are residential walkup properties, with mixed-use properties next occupying 17 percent of the space. The bulk, or 77 percent of the built space, is in Brooklyn, with Queens next at 15 percent of the space.

Surrounding

Within a 400-foot radius of 161 East 89th Street, PincusCo identified 10 commercial real estate items of interests occurred over the past 24 months.
Of those 10 items, one was for major renovation including a certificate of occupancy change. It was an initial temporary certificate of occupancy issued on November 24, 2020 for the $844,000 renovation of zero-square-foot R-3 building with one residential units at 156 East 89th Street.
Of those 10 items, two were sales above $5 million totaling $44.5 million. The most recent of the two was Vincent Ventura which bought the 38,500-square-foot, 43-unit rental (D3) on 151 East 90th Street for $15 million from Vadim Dorfman on June 15, 2021.
Of those 10 items, seven were loans above $5 million totaling $128.5 million. The most recent of the seven was Caiola Family which borrowed $15.7 million from JPMorgan Chase secured by the 81,837-square-foot, 100-unit rental (D6) on 1588 3rd Avenue on February 7, 2022.

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