Bucking a Manhattan trend toward larger units, Ziel Feldman’s HFZ Capital Group has filed a proposal to convert a Nomad rental building into condominiums featuring a top floor of five studio penthouses.
Midtown-based HFZ submitted an application with the New York State Attorney General’s office on Nov. 26 to convert the 177-unit rental building at 88 Lexington Avenue into a condo tower with the same number of units.
HFZ filed the proposal, which calls for creating seven penthouse apartments total, according to the preliminary offering plan, which The Real Deal reviewed this week.
The lowest priced top-floor unit is a 584-square-foot studio, asking $1.84 million, while the largest penthouse is asking $2.785 million for an 867-square-foot studio, each more than $3,150 per square foot. There are also two one-bedroom penthouses, one with 824 square feet and one with 740 square feet. The average price per foot for the building is $1,999.
Currently, the building has 23 rent-stabilized units, 11 vacant units and one residential manager’s unit in the building. The rest is occupied by market-rate tenants. The building has a total sell-out price of $279.8 million.
Feldman could combine the apartments later, but under the conversion law he has to file plans for the units as they are currently occupied because each renter, after he submits his final offering plan, has an exclusive three-month window to purchase the units, real estate insiders said.
He may have an opportunity to vacate the units, said real estate attorney Alvin Schein, a partner with Seiden & Schein. That’s because between the date the plan (known as a red herring) was filed last month and when the plan is declared effective by the AG’s office, HFZ does not have to renew any leases. That period is normally about nine months, allowing many one-year leases to expire. However, there are restrictions on not leasing units, known as warehousing.
Neither HFZ nor Corcoran Sunshine Marketing Group, which was hired to market the condos, responded to a request for comment.
HFZ, based in Midtown, has been busy this year with condo development projects, filing a total of five plans this year with a combined initial offering price of more than $1.1 billion.
The others are the 13-story 90 Lexington Avenue, a 105-unit building built in 1957, adjacent to 88 Lexington. The average listing price is $1,840 per square foot, according to an analysis of the Schedule A. Most of the apartments are occupied by market-rate tenants, but there are also seven rent-stabilized units, 11 that are vacant and one occupied by the resident manager. That building has a total sell out price of $153 million.
In addition, Feldman filed condo plans for 235 West 75th Street, a 212-unit, Upper West Side building on Nov. 13, with an initial total sell-out price of $316.4 million, data on the AG’s office website shows.
The other two projects are for a 35-unit, ground-up project at 505 West 19th Street straddling the High Line filed in June with no total price listed; and a co-op plan filed for the Chatsworth at 344 West 72nd Street, also in June, with a total price of $388.7 million.
Three of those plans were filed on buildings that Feldman does not yet own — 88 and 90 Lexington and 235 West 75th — but is expected to close on next week, an industry source said. This summer, Feldman inked a contract to pay $600 million for a four-building, 750-unit package from Westbrook Partners. There are no conversion plans filed for the fourth building in that package, 301 West 53rd Street, a 264-unit building in Clinton. That Westbrook deal was brokered by Douglas Harmon and Adam Spies of Eastdil Secured.