Larry Gluck’s Stellar Management has purchased an apartment building at 26 Vandam Street for $6.1 million in a play to add air rights to its undertaking at One SoHo Square.
Gluck plans to tack the 15,625 square feet of air rights onto the 80,000 square feet of new office penthouse space being added to neighboring 161 Sixth Avenue and 233 Spring Street.
“Because the air rights are essentially unusable towards the immediate property, Stellar Management will use them for the huge redevelopment of the office buildings next door — that will be a huge win for them,” said Peter Von Der Ahe, a first vice president of investments at Marcus & Millichap, who brokered the deal along with Joe Koicim, a vice president of investments, and David Lloyd.
That’s not to say the 9,385-square-foot property doesn’t have potential in its own right. The building features 21 units — five two-bedrooms and 16 one-bedrooms — and the current one-bedroom average rents fall 46 percent below the market average of $2,500. Converting some of those units to two-bedrooms is also an option.
“The building is nestled between the hottest rental markets in the city, so for someone who does a lot of renovations there’s a ton of upside,” Mr. Von Der Ahe said. “This was demonstrated in several buyers’ rent projections, as some believed they would achieve 30 to 40 percent increases after renovation in the free market units alone.”
The building is located between SoHo, Tribeca and Greenwich Village, neighborhoods at the forefront of Manhattan’s gentrification over the past several years and office rezoning plans that have helped transform them into high-end residential markets.
“Within the first week of hitting the market we had over ten offers, most of which came from highly-qualified buyers,” Mr. Koicim said, adding that the deal closed in 22 days. “It was very important for this seller to close before the end of the year, and Stellar Management stepped up with an all cash offer.”
The planned $75 million renovation for the 740,000-square-foot office development project at One SoHo Square in Hudson Square will combine 161 Sixth Avenue and 233 Spring Street into one entrance and was purchased by Stellar Management and Imperium Capital earlier this year for a reported $200 million.