Dalan Management and Elion Partners Acquire UWS Mixed-Use Property

NEW YORK CITY—Real estate investment firms Dalan Management Associates and Elion Partners through a joint venture have acquired two adjacent buildings comprising 68 multifamily units with ground floor retail. AAG Management sold the property, located at 2568 Broadway and 226 W. 97th St. in Manhattan’s Upper West Side for approximately $66 million.

Current retail tenants include Bank of America, Dunkin Donuts and Paris Baguette. The property’s residential units have both rent-stabilized and market value units. Dalan and Elion plan to co-manage the asset, with a long-term goal of renovating the residential rental units, adding bedrooms and splitting apartments.

Elion, which was founded eight years ago in Miami, plans to acquire more property in the region. Dalan owns over 50 properties in New York, Phoenix, Washington DC and Los Angeles, comprising approximately 1,500 residential units and 100 commercial units, with a market capitalization of over $1 billion.

“With careful hands-on management, and its prime location, these units will serve as great residences and attractive retail hubs for years to come,” says Daniel J. Wrublin, founder and principal of Dalan.

“This partnership aligns with Elion’s overall investment strategy, which focuses on acquiring high quality assets at or below replacement costs, in irreplaceable locations, with the use of moderate to low leverage,” says Juan DeAngulo, managing partner at Elion. He adds the partnership with Dalan marks Elion’s first entrance to the New York City market. “We see great potential both with this asset and in the Greater New York region and look forward to further penetration in this market,” he says.

But some additional work on the recently acquired properties still lies ahead. Prior to the purchase, the property had several Department of Building violations. An Elion spokesperson says the seller paid all fines upon the closing. However, the department notes the following outstanding matters regarding the recently acquired properties.

For the property at 2568 Broadway, New York City Department of Buildings records indicate there are 10 open Environmental Control Board (ECB) violations, nine dating from 2012 and earlier. The most recent violation, issued to the prior owner AAG Management on June 4, 2018 is for the failure to maintain the building’s façade. A department spokesperson tells GlobeSt.com that it has not yet been adjudicated by the Office of Administrative Trials and Hearings. If this office upholds the violations regarding the façade, at a hearing scheduled for July 19, 2018, the responsible party will be required to conduct the relevant building repairs and certify with the DOB that the violations have been corrected.

The building at 2568 Broadway also has two active DOB violations for failure to certify correction of an immediately hazardous ECB violation. These violations each carry civil penalties of $1,500.

At 226 W. 97th St., the DOB records show there are five open violations. The DOB spokesperson points out that one was issued in 2004, two were issued in 2010, and two were issued in 2011. The 2011 violations were for failure to maintain the building in a code compliant manner due to improper exits installed on the first floor, and for having an entranceway that was not ADA (American Disabilities Act) compliant. The 2011 violations were issued against an entity, 230 West 97th Street LLC.

The DOB spokesperson explains that to correct these violations, the building owner must bring the buildings into compliance with the city’s building code and certify corrections of each violation with the department.

The buildings were originally constructed in 1920. AAG Management purchased the property in 2004 from Misa Chang, Betty Shau and Lin Shen for $16.5 million, according to Real Capital Analytics.