By Linda O’Flanagan
Developer Martin Nussbaum is preparing to polish a rough diamond he dug up on Sutton Place.
The principal and co-founder of Slate Property Group just paid $13.95 million for a near-empty apartment building held for nearly 13 years by Izak Senbahar and Simon Elias’ Alexico Group.
“It is rare to find a predominately vacant building in a premier Manhattan neighborhood,ˮ said Nussbaum. “This, along with the architectural design of the property, presents an incredible re-development opportunity. By repositioning the existing building and bringing in high-end retail tenants, we will maximize the building’s value and add to the neighborhood’s growth.”
Slate purchased the fee simple interest in the 90 percent vacant six-story property at 401 East 50th Street in partnership with equity partner Avenue Realty Capital (ARC).
It has 20 apartments and 2,125 s/f of retail space that Nussbaum is planning to gut. Over the next year, Slate will convert all vacant units into modern, luxury residences with high-end finishes and re-configured layouts.
The retail, said Nussbaum, should attract any one of a plethora of upscale businesses recently drawn to the area.
“This is a premier rental neighborhood,ˮ said Nussbaum. “It’s not too far away from the UN, so we think we are going to be able to draw an international clientele to the apartments.
“We also have a great opportunity to add to a local retail strip that has seen a lot of momentum in recent months, with high-end restaurants and nice wine bars opening on what has become a nice pocket of retail servicing the local market.ˮ
Although Slate has been on something of a binge in recent years — they’ve bought over 30 buildings in the past five years — Nussbaum admitted he was particularly thrilled with 401 East 50th Street.
“It is pretty unique to find a predominantly empty building with this sort of beautiful facade and phenomenal architecture that we now have the ability to reposition as a luxury boutique property. You could never build a new property with this level of design and architecture today.ˮ
Udi Kore, principal and co-founder of Avenue Realty Capital, said the deal with Slate “fits perfectly in our value-add multifamily investment strategy in New York and the surrounding areas. It is a valuable addition to our growing portfolio.”
The deal was brokered by Clint Olsen and Jonathan Hageman from Cushman & Wakefield.
While neither the brokers nor the sellers returned a request for comment by press time, it is likely that Alexico purchased the building for its air rights during the company’s pre-recession prosperity.
Senbahar was known as a land-banker during the early 2000s as he and Elias dominated the luxury residential market with developments such as The Mark, The Laurel and the Grand Beekman.
The company defaulted on several projects during the recession, but is just coming off a successful run at 56 Leonard where all but one of the 145 luxury units have reportedly been sold.
The Daily News reported that Alexico sold $10 billion worth of apartments in 10 months when 56 Leonard returned to the market following a recession hiatus.
The company did not respond to a request for comment.
Meanwhile, Nussbaum has no plans to ease up on his buying. He said he is in contract on three other multifamily properties in prime neighborhoods below 96th Street in Manhattan and in Brooklyn