FAR ROCKAWAY, NY—After a heated battle for ownership, Cobb Realty has snapped up 22-29 Dix Ave., a distressed property here, GlobeSt.com has learned EXCLUSIVELY. The buyer—for whom the principal investor isn't being named—was under contract within three weeks of the asset coming on market, according to Besen & Associates, which represented the buyer in the deal.
Poorly run for some time—with just under 20% of tenants enmeshed in courtroom battles over non-payment of rent—the 130-unit, five-building property was sold for $8.5 million, or $103 per square foot. C-III Realty Services and Savills served as exclusive representation for the seller, JP Morgan Chase, and Lev Mavashev of Besen represented the purchaser. On the legal front, Winstead PC represented the seller and Neil Kupferman of Neil Kupferman PC represented the buyer.
“We don't see too many sales from banks in this market so there was a lot of interest in this deal,” says Mavashev. “It closed within three weeks because of the competition.”
That fierce interest stemmed from the price and the potential for the property, which is 84% occupied, he adds. “Its cheap, as long as the buyer doesn't mind doing the work. He, the buyer, plans to spend about $2 million to upgrade the asset and attract a better class of tenant. He's banking on improving the cash flow by getting the rest of the complex occupied and turning over those tenants that are creating a non-payment issue.”
He continues, “This buyer moved at lightning speed. Given the fact that the property was operating in the red for the past two years, which was further exacerbated by Hurricane Sandy, a highly competent operator was paramount to making the deal.”
JP Morgan bought the note from CIBC, who were the original lenders to a private developer who built these buildings in 1998. They subsequently took the property back and put it back on the market. The property had undergone over $2 million in renovations after Hurricane Sandy, and benefits from the 421a tax exemption program, with approximately 10 years remaining. It is adjacent to the Beach Channel and Dix avenue bus stop and four blocks from the Far Rockaway MTA train station.
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Rayna Katz
Rayna Katz is a seasoned business journalist whose extensive experience includes coverage of the lodging sector, travel and the culinary space. She was most recently content director for a business-to-business publisher, overseeing four publications. While at Meeting News, a travel trade publication, she received a Best Reporting award for a story on meeting cancellations in New Orleans during Hurricane Katrina.
