Four years ago, 518 Broadway left the main retail store this month. It’s been empty ever since. Some of the lofts on the four upper floors also sat empty.
Longtime owners of the Soho building, Jack and Rina Cywiak of Lakewood, New Jersey, claim they had vacancies, but at such a low rent that they would still lose money. Instead, they collect nothing.
Potential tenants have offered $ 250 per square foot for long-term rental of a retail house on the ground floor and $ 30 per square foot for lofts, the owners claim in court documents. “Concluding a long-term lease at these low rents would make the building unsustainable for the future,” their petition said.
Soho is one of the city’s major retail destinations, and Cywiaks expect the ground floor of 518 Broadway to generate 80 percent of the building’s rental income. This is based on the fact that it was leased to high-ranking tenants such as Dune London, a British footwear brand that opened its first American base on site in 2014. Time Out magazine marked the opening write down.
But since the shoe store was closed in October 2016, the property has caused nothing but sadness for the couple.
Telephoneed by Jack Cywiak, he said he was too busy discussing the building, which has been in his wife’s family since 1968 and under the direct control of the couple since the 1990s. But he said: “We are trying to find a tenant or sell him. One of the two. “
Meanwhile, they question the city’s assessment in court in an effort to reduce the property tax, which they say is too high for a mostly empty building.
The gross income of the five-story property, which once was $ 715,000, has dropped to $ 270,750, their petition says the building has been operating at a loss since 2018, despite Jack Cywiak’s remission of administration fees.
Jack & Rina, a limited liability company through which the couple owns the building, paid property taxes of $ 408,000 to the city in fiscal 2019 and $ 439,000 in fiscal 2020. Cywiaks before this year’s city tax commission has questioned the assessment of 518 Broadway’s $ 3.63 million reduction to $ 2.9 million, according to Property Shark. However, they are looking for more in the state court.
Their petition states that due to the pandemic, the rental situation in Soho is unlikely to improve. However, this point is unlikely to help their case, as the assessments are based on the state of the property on January 5, before the pandemic. The timing is problem for property owners across the city this year.
However, the problems of the retail sector go back several years, partly due to the transition to online shopping. A CBRE report this month noted that average demand for rents in Manhattan’s main retail corridors fell 12 consecutive quarters.
Cywiaks will have a stronger argument for lowering ratings next year. In the Soho Corridor, which includes 518 Broadway, the average required annuity fell 20 percent a year ago to $ 388 per square foot.
It is still unclear why the bids on 518 Broadway, between Broome and Spring streets, reportedly lost so much less. The building was reportedly renovated in 2014and Google photos from October 2019 show active interpretations in all properties around and dozens of pedestrians in the block. Berta NYC, a line of high-end evening dresses and wedding dresses, maintains a showroom on the second floor.
Joseph Frank, the lawyer and broker for the property, declined to comment.
Erik Engquist contributed the news.