Ezratty of Eastern Consolidated assists in $126 million building sale

In one of the largest Upper East Side apartment building transactions to close in recent months, 360 East 65th St., a twenty one, story 158 unit apartment building with five retail stores, one professional space, and a 69-car garage, traded for $126 million to Stonehenge Partners. Eastern Consolidated vice chairman and principal Brian Ezratty represented both the seller, Broadway Management Co., Inc. led by Joseph Neumann and Charles Herzka, and procured the buyer, Stonehenge Partners, led by Ofer Yardeni and Joel Seiden. "Based on the number of existing market rate units (57%), the property could begin the conversion process immediately, although the new owners will likely operate it as a high-end rental," said, Ezratty. "The stores along First Ave., which comprise 9,700 s/f, are 100% occupied at an average rent of $75 per ft., 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 said, "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 retail area surrounding Bloomingdales and is in walking distance to Midtown's Plaza District. Tenants will continue to be drawn to this neighborhood, particularly in anticipation of the Second Avenue subway, completion set for 2011. Eastern Consolidated's chief economist Barbara Byrne Denham said, "This transaction validates how insulated the Upper East Side real estate market is from the current climate affecting Wall St. 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 East 65th St. with an all-cash offer. Liquidity of that magnitude is extremely rare given the current credit-squeezed investment environment. The sale demonstrates that demand for Upper East Side property has not at all abated and will continue to spread further east of Second Avenue as the subway development progresses." Wayne Lopkin Esq. represented the seller, and Joseph D'Angelo of Greenberg Traurig LLP acted on behalf of the buyer.