Real Estate

Lyons trustees sell property along Bowery for $62 million

Descendants of Nathaniel Lyons owned 11 non-contiguous properties along the Bowery that were in the family since the 1930s.

Located between Houston and Canal Streets, these buildings were previous hotels for vagrants, which became either Interim Multiple Dwelling, or IMD, apartments subject to Loft Laws, or rent-stabilized apartments. It also included a single room occupancy dwelling, or SRO.

In recent years, however, the Bowery has gone from bums to boom, with luxury retail stores and modernized apartments getting price boosts.

After some internal maneuvers, the now far-flung family members and trusts agreed to sell and retained Massey Knakal Realty Services.

John F. Ciraulo, along with the team of Michael A. Azarian, Robert Burton and Michael DeCheser, believed they could sell for around $50 million — some $25 million more than rivals — but half of what they would have gotten without the convoluted tenancies.

In September, their goal was to sell for $54 million before new capital gains taxes in 2013 would add $5 million to costs. They identified all-cash buyers, and whittled down to a handful before starting to finalize a deal. By Christmas, they had run out of time.

The missed deadline caused mistrust among the family and 11 different attorneys representing several layers of trusts, including one with JPMorgan Chase. The Massey Knakal brokers had to win them back with a better result.

“We retooled the marketing program and repackaged it, and remarketed in early 2013,” said Ciraulo. The intense process included three final bid deadlines and updating all the attorneys every few days.

By March, five final bidders, who had submitted a bid of around $59 million, were each sent a title report and “a very seller-friendly” contract based on the needs and wants of each of the trusts — which were all different.

“As these buildings present a huge upside for a new, hands-on owner-operator, the bidding was fierce,” said Ciraulo.

In the end, an investor group led by Joseph Betesh of Milestone Equities bought the portfolio for $62 million.