Open Wounds: Sion Misrahi Looks to Sell Vacant 11 Essex Street Building for $12.5M

Posted on: October 15th, 2015 at 5:00 am by
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Boarded and padlocked shut, 11 Essex Street is the proverbial timebomb that’s been ticking for the past six years, counting down to certain demise. Freshly stapled “no trespassing” signs (and the “make affordable” graffiti) serve as reminder of the slumlord tactics by Lower East Side real estate baron Sion Misrahi at this location.

The narrative was the same then as it is now. Nothing has really changed, that’s the sad part. Misrahi successfully booted a predominantly Chinese low-income building under the guise of emergency repairs. Construction of the neighboring condo at 7 Essex destabilized the structure years earlier, but Misrahi allegedly did little to repair the issues until it was too late. The Department of Buildings ultimately issued a full vacate order in 2009 due to unsafe conditions.

Yet the tenant harassment began much earlier.

The Villager noted at the time:

Across from Seward Park, 11 Essex St.’s top story leans out 9 inches over the ground floor. Inside, metal poles prop up caving-in ceilings. Out back, bricks have tumbled from the facade, leaving gaping holes behind.

On May 27, the Department of Buildings issued a full-vacate order, giving the rent-protected tenants just a few hours to pack up their apartments before the front door was locked behind them.

Before the vacate order in May, Misrahi had already cleared out most of the building’s tenants: As of this spring, only six of the 22 units were occupied.

Misrahi said he offered buyouts to some of the original tenants so he could fix up the building. He would not say how much he paid, except that it was less than $30,000 per apartment.

Longtime tenants said Misrahi persistently combined buyout offers with harassment in an effort to get them out of the building.

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There had been subsequent plans to enlarge the building, and renovate for luxury, but that proposal was disapproved by the DOB. Now Sion Misrahi is looking to unload this fourteen-year-old investment for $12.5 million. Here’s the real estate listing, from the mouth of the beast (broker Yesim Ak):

Delivered Vacant.

Potential for a $1.2m Rent Roll This property is a 6 story building currently configured with 22 residential apartments (one bedrooms) and 2 commercial stores with a gross square footage of 10,800 SF above grade and an additional 1,775 SF basement. The building requires a full gut renovation, and utilizes gas heating. Potential to develop a $1.2 million dollar rent roll: $100 psf for retail units, $30 psf for basement, and $80 psf for apartment rentals; resell for 22 times rent roll after completion, for a $26 million dollar sale. The building can be utilized as a rental building, condo or single family home.

Meanwhile, 11 Essex Street was last in the news due to its linkage in the corruption case against disgraced former Assembly Speaker Sheldon Silver. His crony was Martin Shulman, the judge on a tax assessment case involving an increase of $200K that Misrahi was fighting.

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