The Real Deal New York

Queens investor nabs Midtown retail condo

Heskel Group pays $11.3M for space leased by CVS
December 17, 2012 12:30PM

The Forest Hills, Queens-based Heskel Group has purchased a retail condominium in Hell’s Kitchen from developer Alchemy Properties and its partner Jamestown Properties for $11.3 million last week. The two-level space leased for 25 years to drugstore chain CVS was the Heskel Group’s second acquisition of 2012.

Heskel Group, led by CEO Yeheskel Elias, closed on the purchase of the 14,274-square-foot retail condo at 800 Tenth Avenue, at 54th Street — that includes 8,954 square feet on the ground floor —on Dec. 12, he told The Real Deal.

The store space is the larger of two retail condos at the base of Griffin Court, a 95-unit residential condo project developed by Kenneth Horn’s Alchemy and Jamestown; sales started in March 2010.

Alchemy announced in August that it was developing 40 residential condominiums in the tower portion of the Woolworth Building  at 233 Broadway, near City Hall.

The drugstore, which is expected to open in the second quarter of 2013, is the first for CVS in Hell’s Kitchen. Asking rents for the retail space were $95 per square foot on the ground floor, according to information from the developer.

Elias said he was banking on the long-term, and was not looking to replace CVS with a higher-paying tenant. Elias invests in so-called triple net deals in which the tenant pays the taxes, insurance and operating expenses and the owner receives an income stream from the rent.

Elias purchased the space in part because he believed Related Companies development of Hudson Yards would bring additional customers to the area.”That will bring lots of foot traffic,” he said.

Daniel Rahmani, a senior managing director at investment advisory firm Venture Capital Properties, located in Midtown, brokered the sale. Robert Gibson, from Cushman & Wakefield, represented Alchemy and Jamestown. A team of Newmark Grubb Knight Frank brokers, including Jason Pruger, Ross Kaplan and Trever Gallina, represented CVS.

In February Heskel Group paid $18.42 million for a retail condo at 991 Third Avenue, occupied as a result of a long-term lease by Capital One Bank. — Adam Pincus