Besen sells Chelsea portfolio.
This eclectic portfolio, located on the south side of 22nd Street between Eighth and Ninth avenues, consists of a decontrolled corner building, three single-room occupancy buildings and five townhouses. There are approximately 106 residential units, six offices and a corner store in the portfolio, all of which were undervalued, according to Polsinelli.
The seller, long-time owner Baychester Properties, approached Polsinelli to orchestrate the marketing efforts on their behalf. The activity on this portfolio was extraordinary. A tremendous amount of offers were generated, as the portfolio was sought after by many investors.
Polsinelli cited the strong demand for large packages in chelsea and the lack of supply as reasons for the extraordinary activity. With its stellar location and the opportunity to create value by upgrading the units, many investors aggressively pursued the deal.
Due to the various hurdles involving tenants and legal issues, Polsinelli worked closely with several investor groups and their architects, engineers and acquisition staff to identify the risks involved and research all possible resolutions. After serious analysis, it was evident that based upon market projections for the vacancies, the Property was valued at seven times the gross rent roll, with a 14 percent return on investment.
After obtaining dozens of serious offers in a relatively short period of time, the ultimate buyer secured a contract based on his ability to close quickly and put up a substantial security deposit. With careful diligence and closed-door negotiations, the buyer, a long-time customer of Besen and Associates, was able to assess the issues and resolve most of the pending cases, facilitating the transaction.
Polsilnelli represented both parties to the transaction.
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|Publication:||Real Estate Weekly|
|Article Type:||Brief Article|
|Date:||Dec 15, 1999|
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