Thank you for sharing!

Your article was successfully shared with the contacts you provided.

NEW YORK CITY-A residential/retail loft building at 126-130 Orchard St., situated between Delancey and Rivington streets, is on the market for sale with an asking price of nearly $23.3 million.

Eastern Consolidated’s executive director Stuart Gross, with senior director Deborah Gutoff, are marketing the fully occupied, completely renovated property. According to Eastern, the building would serve as an ideal 1031 exchange candidate, since minimal maintenance and management is required, providing significant future upside.

Gutoff tells GlobeSt.com that the seller is the Velum Corp., a single asset entity owned by a local investment group. “The owner believes the property’s highest value will be realized in its condominium conversion potential,” she says, “but due to tax considerations, has decided to sell in order to receive advantageous long term capital gains treatment versus the ordinary income that it would derive from undertaking the conversion process itself.

Eastern also explains that offshore investors could find this property enticing for the same reasons using the benefit of their strong currency. “All of the residential units were completely renovated in 2002,” Gross explains. “The existing J-51 tax abatement was secured in connection with the renovation of the property in 2002 for a 15-year period which expires in 2017. While the units are technically stabilized, there is no practical restriction imposed since the legal rents are substantially in excess of the current preferential rents. Therefore, a new owner will enjoy the benefits of the J-51 tax abatement while raising rents to the legal limit as fast as the market will bear.”

The residential units themselves feature soaring ceilings as high as 20 feet with large open layouts. The two penthouse floor units include extensive roof gardens with views of lower Manhattan. The property is situated in the heart of the historic Lower East Side, which is enjoying a major renaissance, according to Eastern.

“The retail rents are significantly under market,” Gutoff says, adding that they currently average $68 per sf. “But since their leases all expire within the next two years, the new owner will be able to increase rates as much as 40%, to $115-125 per sf at present market rates.”

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 3 free articles* across the ALM subscription network every 30 days
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


Join 1000+ of the industry's top owners, investors, developers, brokers & financiers at THE MULTIFAMILY EVENT OF THE YEAR!

Get More Information


Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.