California’s Carmel Partners Expands its foothill in New York as Lightstone divests itself of an asset there.
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New York real estate firm Lightstone Group has agreed to sell its development at 112-118 Fulton Street in lower Manhattan to the San Francisco-based investment and building firm Carmel Partners for more Than $170 million, according to a report in The Real Deal.
The plan was originally to build between 112-120 Fulton, but Lightstone was forced to remove 120 after it failed to win approval for a 421-a tax abatement. The site is said to hold anywhere from 380, 000 to 406, 000 square feet.
The building site includes three separate parcels of land with air rights above on Fulton and Dutch Streets. The firm had already demolished several old low rise apartment buildings there. It was the aspiration of Lightstone to construct a 48 story, 452 unit tower there, and later a 460 unit 59 story building on the site, 20% of whose units were to be reserved for affordable housing under a standard 80/20 plan.
This will be the second development site in Manhattan for Carmel Partners which is headed by Ron Zeff. Carmel owns and develops property across the United States with an emphasis in California and Washington, D.C. The company is part of a joint venture which is building a residential tower at 325 Lexington Avenue, between 38th and 39th streets in Midtown Manhattan.
In January Carmel acquired the 151-unit rental tower at 15 Cliff Street in Lower Manhattan for $95 million and in 2012 it bought a 163 unit apartment building, the Electra, at 354 East 91st Street, also for $95 million.
Founded in 1988 by David Lichtenstein, the Lightstone Group is a privately held real estate investment company which owns and operates a diversified portfolio of multifamily, office, industrial, hotel and retail properties. Lightstone has invested directly in individual real estate assets and in real estate operating companies. It has regional offices in key markets across the country, including New Jersey, Chicago, Detroit and Baltimore.
In its first decade, Lightstone focused on multifamily residential properties. The firm transitioned to retail with the purchase of Prime Outlets, a chain of outlet malls, in 2003 when we came to view the multifamily market as overpriced. When the retail market tightened, it shifted focus to industrial investments.
In 2005, it gained a significant foothold in the office market with the purchase of a portfolio of office buildings located primarily in the Chicago area.
Lichtenstein’s first investment was a two-family house purchased for $89, 000 in 1986 with a down payment from his savings and his credit cards. Two years later, when the Lightstone Group was founded, he owned three apartment buildings.
Lichtenstein and his firm, Lightstone Group, were required to put $100 million in escrow while they appealed a judgment in the bankruptcy of the Extended Stay hotel chain, the largest, mid-price extended-stay hotel company in the United States, with 683 hotels and approximately 76, 000 rooms located in 44 states and Canada. The developer had led a disastrous $8 billion leveraged buyout of the company in 2007. Lichtenstein then sued his lawyers, whom he blamed for his troubles, for malpractice.