Comedy Cellar owner pays $7.3M to McDonald’s for shuttered location in Greenwich Village

UPDATED 8:55 a.m., March 20, 2023: The owner of Comedy Cellar through the entity Dwormanco, LLC paid $7.3 million to the McDonald’s Corporation for the shuttered location (K2) at 136 West 3rd Street in Greenwich Village, Manhattan. The Comedy Cellar operates two club locations on the block, at 130 and 132 West 3rd Street, in addition to its main location at 117 MacDougal Street.

McDonald’s owned the property for just under 50 years.
This acquisition is another example of a trend of occupiers acquiring properties, including inventor James Dyson purchasing a SoHo property that will be leased to one of his retail brands, Akris buying in SoHo and on Madison Avenue and Lucille Lortel Theater buying in Chelsea.

A CBRE team led by Daniel Kaplan was the broker on the McDonald’s sale, and was also a broker on the Dyson and Akris transactions.
The Comedy Cellar deal closed on March 10, 2023 and was recorded on March 17, 2023. The property has 5,141 square feet of built space and 1,740 square feet of additional air rights for a total buildable of 6,880 square feet according to PincusCo analysis of city data. The sale price per built square foot is $1,419 and the price per buildable square foot is $1,061 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 McDonald’s Corporation was Stephanie S. Hipp. The signatory for Comedy Cellar was Noam Dworman, the owner of the establishment. McDonald’s bought the parcel in May 1973 paying $68,750, according to an analysis of the New York State Real Estate Transfer Tax of $275.

The Comedy Cellar owner agreed to the following restrictions: for 20 years the space may not be occupied by a quick service restaurant, but the agreement does permit a sit-down restaurant with waiters. Also, the space may not be occupied to sell marijuana, pornography or illegal drugs. Time Out reported on the McDonald’s after its closing, in a 2021 post. Noam Dworman operates the Comedy Cellar at Village Underground at 130 West 3rd Street, and at the Fat Black Pussycat at 132 West 3rd Street. 134 West 3rd Street, a mixed-use building between the properties leased to Comedy Cellar and the McDonald’s, is owned by the family of Leslie J. Garfield and occupied by a bar. 130-132 West 3rd Street is owned by Pierre le Gal de Karangal, according to property records.

Prior sales and revenue

Prior to this transaction, PincusCo has no record that the buyer Comedy Cellar had purchased any other properties and has no record it sold any properties over the past 24 months.
The seller McDonald’s Corporation had not purchased any other properties and had not sold any properties over the same time period, though it did sell 429 Seventh Avenue to an anonymously owned entity, Buvet Fee Owner LLC, in 2019 for $35 million. The 5,141-square-foot property generated revenue of $531,519 or $103 per square foot, according to the most recent income and expense figures.

The property

The 136 West 3rd Street parcel has frontage of 40 feet and is 50 feet deep with a total lot size of 2,000 square feet. The zoning is R7-2 which allows for up to 3.44 times floor area ratio (FAR) for residential. The city-designated market value for the property in 2022 is $2.6 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 $2,000 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 Greenwich Village, the bulk, or 24 percent of the 22.4 million square feet of commercial built space are specialty buildings, with hotel buildings next occupying 17 percent of the space. In sales, Greenwich Village has 3.5 times the average sales volume among other neighborhoods with $1.2 billion in sales volume in the last two years and is the 11th highest in Manhattan. For development, Greenwich Village has near average amount of major developments among other neighborhoods and is the 24th highest in Manhattan. It had 1.1 million square feet of commercial and multi-family construction under development in the last two years, which represents 5 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of seven of the 26 commercial properties representing 123,211 square feet of the 327,446 square feet. The largest owner is Suppiah Kameshwara, followed by Pari Dulac and then New York University.
There are no active new building construction projects on this tax block.

The majority, or 36 percent of the 327,446 square feet of built space are walkup buildings, with specialty buildings next occupying 22 percent of the space.

The seller

The PincusCo database currently indicates that Mcdonald’s Corporation owned at least one commercial property in New York City with 14,627 square feet and a city-determined market value of $7.3 million. (Market value is typically about 50% of actual value.) The portfolio consists of at least a single retail property. It is located in Bronx.

Updated with brokerage information.

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