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NEW YORK CITY-Penson Cos. has bought three Upper East Side commercial buildings from Extell Development Co. for $10.75 million. The deal, reportedly the largest multi-unit transaction in Manhattan thus far this month, includes 1667 First Ave., 1522 First Ave. and 402 East 80th St. The First Avenue properties are zoned for retail and residential while the property on 80th Street is exclusively residential.

Robert Knakal and Thomas Gamno from Massey Knakal Realty Services represented Extell while Herb Hirsch, EVP of investment sales at CS Commercial Group, served as the buyer’s agent. Most of Penson’s holdings are in Queens, Brooklyn and the Bronx.

CS Commercial Group’s Hirsch and company president Greg Roberts tells GlobeSt.com that Extell had bought these buildings for the air rights, and had planned to develop and rehab them, putting them back in their original condition, matching the neighborhood’s exteriors. Then, Hirsch says “we gave them an offer, and they’ve accepted it.”

Roberts calls the deal “rare,” adding “we thought the sellers were being a little bit aggressive” in their pricing. But, he says “it’s exactly what Penson needed, due to a 1031 situation.”

Looking from outside the sandbox, Hirsch says “the market is right at this point where people are becoming realistic, so I think we’re going to see a little change over the next couple of months.”

Those deals will likely involve assumable financing or cash buyers according to Roberts. He says that without those two, deals are not going to happen. Still he acknowledges, that limits the pool of qualified buyers out there. With that, he prescribes that sellers need to come down off their prices.

Roberts, an owner himself who happens to be trying to sell, admits he too has to come off pricing. As those adjustments come to fruition, he says, the buyers who actually can buy can expect fair market pricing.

There are those, however who say that these past five years has been an unfair market. In response, Roberts points to what he calls “funny money,” with the CMBS market making the lending environment very aggressive some with 80%, 90% financing, mezzanine financing, people overleveraging, overpaying and now, “we’re in a massive correction period” he says.

“I strongly believe we’re in a return to fundamentals,” Roberts tells GlobeSt.com. But, as with any fundamental change, he says it will take time for sellers to re-adjust their thinking.

“We are in a new world now, it’s a 180 degrees different than it was just two years ago,” says Roberts. “Then, you had lenders knocking at your doors trying to give you financings. You knew in a year or two, with some capital improvements, you’d be able to refinance, take out some money.”

But Hirsch interjects that this whole strategy has changed. He adds, “people are becoming more realistic, the sellers and the buyers. Together, the market will change.”

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