Downtown Building Sells For $6.9M

Paul Bass PhotoThe latest evidence of downtown’s hot real estate market: The 129 Church St. office building across from the Green has sold for $6.9 million—15 times what it fetched two decades ago.

A growing local real-estate company, MOD Equities, purchased the 89,625-square-foot, eight-story brick building from JMJ Services Inc., a company associated with James Salatto.

JMJ bought the building in 1993 for $450,000, according to land records.

New Haven was different then. So was 129 Church, observed Frank D’Ostilio of Real Living Wareck D’Ostilio Real Estate, who along with Vincent Torrens represented the buyers in the sale.

The city was mired in recession in the early 1990s. And 129 Church St. was less than half full.

Today the building is at least 90 percent occupied, D’Ostilio said. Tenants range from NBC 30 news and Liberty Community Services to the Urban Design League and attorney’s offices. Chick-Lets Organic Grille occupies a storefront.

While other developers are converting downtown office buildings (like the old Union Trust at Elm and Church) into apartments, MOD plans to maintain 129 Church as offices, said Jacob Feldman, one of the firm’s principals.

“The plans are to hopefully continue running it the way the previous owners run it. They did a beautiful job. We’d like to continue having it as a thriving downtown building. We just want to keep everybody there that’s happy,” Feldman said.

The company does hope to put in a gym along with a meeting place, he said. “What is unique about this building, opposed to other buildings on the block—there are a lot of smaller spaces, 300, 1,000-square-foot units. It would be nice to give them a communal space. It would promote interaction among the tenants and give a tighter-knit feeling to the building.” A roof deck is also under consideration.

In its first weeks of ownership, the company has already discovered beautiful wood floors hidden beneath carpets, Feldman said. The idea is to restore those and other historic details.

Second National Bank of New Haven occupied 129 Church when it was built in 1912.

“We want to peel away some of the layers that were constructed over the years and bring out the original beauty of the building,” Feldman said. “It’s a gorgeous building. The bones are incredible.

“It’s easy to fall in love with the building.”

MOD Equities, which has an office on East Street, started buying properties in downtown New Haven and in East Rock and Wooster Square around four years ago, according to Feldman. He said the company owns about a dozen buildings with some 90 apartments altogether. One of its properties, 101 Orange, includes the Central Steakhouse. “We’re always seeking new opportunities in New Haven,” Feldman said.

MOD Equities formed a limited-liability corporation to purchase 129 Church. The purchase was financed in part by a $4.65 million mortgage from Flushing Bank of New York, according to land records.

Meanwhile, Next Door ...

Melissa Bailey PhotoCity Hall has been working to make a deal happen on that block—not at 129 Church, but next door at 123 Church, the stately 1823 Greek Revival “Exchange Building” at the corner of Chapel.

Developer Paul Denz bought that four-story building in 2013 for $2.7 million. It has Class A office space, which costs more than the space at 129 Church.

While New Haven’s housing market has been hot, “there’s not a huge influx of companies moving in and needing office space,” Denz said.

Enter CRN. The fast-growing radio and social-media marketing company has outgrown its Hamden headquarters. The company has been looking to relocate in either New Haven or New York. New Haven development officials want to see him locate here; they advocated 123 Church as a potential headquarters. (Read about that here and here.)

Denz and CRN reached a tentative agreement on price earlier last year, according to both sides. The state government threw in some job-creating money. But talks stalled. Denz decided he might prefer to own it instead.

Talks resumed this past fall. “Discussions are ongoing, but they’ve been very very slow,” Denz said Thursday. “We did agree on a purchase price. He told me he was going to buy it. It’s just not happening. I’m as interested to know why it’s not happening as you are.”

“We’re still very interested,” said CRN chief Barry Berman. In recent months “time-consuming issues have distracted from focusing on the building,” said CRN’s chief, Barry Berman. He said he hopes to renew focus on the deal.

 

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posted by: citoyen on January 8, 2015  8:50pm

First submission for the new typo contest, just starting up again:

“Denz and CRN reached a tentative agreement on price earlier this year, according to both sides.”

This year is 8 days old.

“This fall the talks resumed.”

So the tentative agreement must have been earlier *last* year, yes?

(I know, it’s cold outside; things get numb!)

[Ed: Thanks! You’re in first place! And it’s no longer 1983, right?]

posted by: Esbey on January 8, 2015  11:34pm

Not to be a greedy tax-paying homeowner, but shouldn’t this affect future tax valuations of all downtown office property?  That could help to shift a bit of the tax burden off of homeowners?

Aside from that, I will be very happy if CRN moves downtown; another growing firm moving in from the suburbs.  I have criticized Paul Denz’s (other) properties for being a blight on the city, but in my book he gets points if he pulls this sale off.

posted by: robn on January 9, 2015  9:07am

ESBEY,

I think the opposite. The property sold for about $77/sf which is ridiculously low compared to residential wood frame construction house prices in the city. For instance I just looked at a modest house at the head of Newhall Street (on Vision Appraisal) and its assessment divided by 0.7 to establish value and then divided by square feet equals $84/sf.

posted by: ILivehere on January 9, 2015  10:22am

@Esbey Denz has only owned it a few months if it had been longer it would look like all his other property.

@NHI Central Steakhouse closed about 4 years ago.