Susan Hewitt of the Cheshire Group, previous owner Mark Terk and 1327-1329 Lexington Avenue
A low-key residential property company based in Greenwich Village paid $105 million for a 99-unit apartment building in Carnegie Hill whose fate had been uncertain following the death of the heir to the property three years ago.
The Cheshire Group, which owns and operates market-rate and rent-regulated properties in the New York metro area, closed on Tuesday on the purchase of 1327-1329 Lexington Avenue, between 88th and 89th streets, in an all cash transaction, the firm’s president, Susan Hewitt, told The Real Deal.
The ownership of Rhinelander Properties was thrown into confusion with the death of the property’s heir Mark Terk at the age of 54 in May 2008. He was survived by his mother, but she was incapacitated and could not serve as an owner of the building.
Hewitt declined to discuss the firm’s plans for the building.
Cheshire beat out numerous competitors since the start of informal marketing last year when bids began as low as $35 million, Sheldon Reiter, an attorney for the seller Rhinelander Properties, said.
The sale price was a victory for Terk’s estate, said Glenn Staack, the executor of his late friend’s holdings, because real estate insiders were skeptical a person with no real estate experience would be able to break $90 million in a sale.
“I am sitting here right now and I am not even sure how I did it,” Staack said. “All I did was stick to my guns.”
The sale price amounted to about $626 per square foot, for the building that PropertyShark.com shows has about 167,000 square feet, including about 12,300 square feet of retail space. About 60 percent of the units are free market, Staack said. The building was built in two phases between 1927 and 1929.
Terk’s estate owned 43.75 percent of the building, while his mother, Lucille Coleman, through a guardian, controlled another 43.75 percent. The remaining 12.5 percent was owned by a trust held in the benefit of Coleman.
Terk’s portion of the sale will go to his non-profit philanthropic organization, the Mark Paul Terk Charitable Trust, which supports women, children and environmental issues, for which Staack serves as trustee.
Reiter said the marketing of the property began in about April 2010. It attracted offers from high-profile operators and investors such as Stonehenge Partners, Parkoff Organization, TF Cornerstone and investment firm Angelo Gordon, insiders said.
The sellers did not hire a broker; instead Staack, with advice from Reiter, managed the sales process.
“What was happening is brokers [looking for us to hire them] were coming to us, bringing low bids. It was not working,” Reiter said.
Then Staack called Rama Bassalali, president and principal with RMB Properties last summer. He brought the Cheshire Group to the deal, Reiter said.
The contract was signed in April and closed this week, according to Reiter and Staack.