Plenty of green as Silverstone sells the Grayson for $100M

Purchased tower for $53M in 2012

From left: Josh Zegen, the Grayson and Andrew Scandalios
From left: Josh Zegen, the Grayson and Andrew Scandalios

Silverstone Property Group has sold the Grayson, a rental building at 247 East 28th Street in Kip’s Bay, for $99.75 million, The Real Deal has learned. 

The 17-story, 109,000 square-foot mixed-use residential apartment tower, on the corner of Second Avenue, has 128 one and two-bedroom units and a ground floor retail space occupied by Chase Bank under a long-term lease.

The buyer of the property is an Asian investment company, which owns one commercial office building in the city, sources said.

Silverstone purchased the property from Samson Management for $53 million in 2012 in partnership with RWN, a real estate private equity fund led by Ari Shalam.

The company then completed a capital improvement program on the building, renovating the lobby, all the common areas and the majority of the units. Building improvements included a new furnished roof deck, new windows, new electric service to every apartment, restoration of the facade, elevator upgrades, and a gas boiler conversion.

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“Silverstone is pleased with the execution of this entire project, from our initial purchase through renovation and now sale,” said Josh Zegen, co-founder of Silverstone.  “We were able to reposition and resell the property ahead of schedule, which further validates our overall investment strategy.”

Zegen noted that while Silverstone initially had envisioned selling the property within five years, it chose to sell sooner since it had already reached its projected levels of return.

The property was marketed by Andrew Scandalios of HFF, and Steven Vegh while the purchaser was represented by George Niblock, Joseph Smith and Lily Ren of Friedman-Roth Realty Services.

Silverstone and RWN have been bullish on the Kips Bay area in recent months. In September 2013, the partnership paid $71.5 million for seven adjacent properties at 33rd Street and Third Avenue, comprising 146 residential apartment units and eight stores.

Martin Nussbaum, a founding principal at Manhattan-based Silverstone Property Group, who left to form a new real estate investment firm called Slate Property Group last year, was instrumental in the acquisition and renovation of the Grayson and still maintained some equity in the project.

In a statement, Nussbaum told TRD: “In just two years, we transformed the Grayson into a first class residence, nearly doubling its value by modernizing the building with high-end condominium-like finishes and luxury amenities.”