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|Number of units||32|
JLL has been retained on an exclusive basis to arrange for the sale of 321 Lenox Avenue, a 6-story mixed-use elevator building located on the corner of Lenox Avenue and West 126th Street. Just steps from both Harlem’s bustling West 125th Street corridor and the express subway station, 321 Lenox benefits from tremendous access to public transportation in one of NYC’s most sought-after culinary destinations. While the neighborhood is known for its local institutions and historic architecture, an influx of large-scale development has transformed the area into a 24/7 hub for residents, professionals and tourists alike.
Comprised of approximately 23,750 square feet, the building is configured as 32 apartments and the Corner Social Bar & Restaurant, one of Harlem’s most popular gathering places since opening in 2011. All of the apartments were deregulaed following a substantial rehabilitation of the property in 1986.
7 of the 32 apartments have been renovated within the past 18 months and are currently renting for an average of ~$49 PSF. The remaining 25 units have varying degrees of legacy finishes and are renting for an average of ~$42 PSF, representing a 16% discount to prevailing market rates. Upgrading the apartment finishes, converting the remaining studios to 1-bedrooms, adding amenities and completing cosmetic renovations of the common areas will allow purchasers to add value to the property and increase rents. All units have signed at least one new lease since COVID. A strong post-COVID rebound in rental rates will act as a tailwind for rent growth and serve to further boost value.
The retail tenant, Corner Social Bar & Restaurant, is a neighborhood staple in a retail corridor that consistently carries little to no vacancy. The popular eating and drinking establishment is located amongst a row of famed restaurants and bars including Sylvia’s and the Red Rooster. Corner Social has performed well throughout the pandemic and is paid current on all of their rental obligations without any abatements. With twice the outdoor patio space than the majority of its competitors in the neighborhood, the bar and restaurant is well positioned to succeed in a post-pandemic world. The retail is leased through 2023 for approximately $119 PSF with 3% annual rent increases. On top of its residential and retail rents, the property also receives income from three Cell Towers located on the roof that pay a combined annual rent of $73,448.
Harlem’s Lenox and 125th Street retail corridor has proven its resilience throughout the pandemic and even seen an influx of new, post-pandemic retail tenancies. Both Target and Trader Joe’s have signed post-COVID leases for new store openings on 125th Street, illustrating the high level of confidence that corporate retailers have in the area’s future as a thriving retail hub. Limited vacancy and new restaurant openings along Lenox up to 130th Street position the asset to benefit from a growing retail presence in the neighborhood.
The building is heated by a new gas-fired boiler and is sub metered for both gas and electric. A series of recent major building improvements include upgrades to the boiler, electrical systems, elevator and roof. As a result, the well-maintained offering requires little need for immediate capital expenditure.
321 Lenox will appeal to investors seeking strong submarket fundamentals and shelter from rent regulation. Coupled with the area’s strong cultural ties, the unique mixed-use nature of the surrounding building stock will continue to drive demand for the foreseeable future. The property lies within an Opportunity Zone and is located outside of all Historic Districts. It will be sold on an as-is, where-is basis.
143’ of wrap-around corner frontage on Lenox Avenue & West 126th Street. Anchored by Corner Social Restaurant & Bar, one of Harlem’s most popular restaurants.
100 % Free Market
The entire building was deregulated pursuant to a Substantial Rehabilitation in 1986/1987 via DHCR order.
Location & Connectivity
Performing Retail in a Growing Retail Submarket
One block from the 125th Street subway station providing access to Midtown in under 20 minutes.
Outstanding Physical Real Estate
32 apartments and 1 retail unit totaling over 23,000 SF in an elevatored corner building.
Protected Light & Air
Ideal location at the intersection of a double wide avenue provides light and air in perpetuity to all apartments.
Well-suited 1031 Exchange Candidate
Prime 1031 exchange opportunity to defer capital gains taxes prior to the potential Biden/Harris tax plan changes.
Remaining Upside & Post-COVID Rental Rebound
321 Lenox is well positioned for a post-pandemic recovery. The next owner will benefit from a strong rebound in rents and have the ability to tap additional upside through unit and common area renovations.