"Based on the number of existing market rate units--approximately 57%--the property could begin the conversion process immediately, although the new owners will likely operate it as a high-end rental," Ezratty explains. "The stores along First Avenue, which comprise 9,700 sf, are 100% occupied at an average rent of $75 per foot, well below market. So there's terrific upside for the new owner to increase retail rental rates, and convert the building to condominiums according to market demand or operate it as a high-end rental building."

Ezratty adds that "Stonehenge competed for the property and won by being aggressive and nimble, acting quickly to secure this excellent residential opportunity." The buyer will benefit when leases on the market-rate apartments and regulated units expire.

The building is situated near the east side hospitals, the prime retail area surrounding Bloomingdales and is in walking distance to Midtown's Plaza District. According to Eastern Consolidated chief economist Barbara Byrne Denham, "this transaction validates how insulated the Upper East Side real estate market is from the current climate affecting Wall Street. Other buyers showed a serious interest in the property but Stonehenge acted more aggressively and was fueled by its recently closed $500-million investment fund which enabled it to buy 360 E. 65th St. with an all-cash offer. Liquidity of that magnitude is extremely rare given the current credit-squeezed investment environment."