Cayre Equities Cashes In On Midtown South Rezoning

Cayre Equities turned a tidy profit on a Midtown South office building, likely thanks to the neighborhood’s rezoning.

The firm sold a 16-story property at 254 West 35th Street in the Garment District for $26.2 million, notching a roughly $10 million gain in less than two years. Cayre bought the 106,000-square-foot property in December 2024 for $16.2 million with plans to convert it to self-storage, then flipped it to Joel Wertzberger’s Joyland for a 62 percent jump in value, property records show.

The deal comes six months after the City Council approved Midtown South’s long-awaited rezoning, unlocking high-density residential development across large swaths of the neighborhood. Plans for a residential conversion were filed in January, according to PincusCo, which first reported the sale, brokered by Itanel Rahamani of Venture Capital Properties.

Joyland nabbed a $27 million loan from Levon Capital to finance the purchase. The debt was arranged by Henry Bodek of Galaxy Capital.

The value surge was likely driven by the rezoning, which makes residential development feasible. The building was zoned as industrial but is now part of a mixed-use district that allows residential, commercial, community facility and light manufacturing uses.

The Midtown South rezoning created two new high-density residential districts that allow projects up to 15 and 18 times the size of their lots. The changes apply to four pockets of Midtown South long dominated by manufacturing zoning that either barred housing outright or capped density.

Joyland apparently doesn’t plan to build the project itself. At the same time as the purchase, the firm signed a 99-year ground lease with Brooklyn developer Mendel Fleischman valued at $6.8 million.

Cayre and Wertzberger did not immediately respond to requests for comment.

Keith Larsen contributed reporting.