Charity case? Hedge funder makes tidy sum off townhouse sale to nonprofit
15 West 76th Street and David Berkowitz (Credit: RiverPark Ventures)
History is repeating itself for the New-York Historical Society.
NYHS originally parted with the five-story townhouse at 15 West 76th Street in 1997. Now, more than two decades later, the nonprofit has bought the property back for $16.5 million from hedge funder David Berkowitz and his wife Nancy, property records show.
The couple also simultaneously granted NYHS a $12.5 million mortgage. Public records indicate that when the historical society previously owned the townhouse, mortgages were traded between wealthy families and corporations including the Royce Family Fund, the Joseph & Claire Flom Foundation, Lawrence A. Wien Foundation and Revlon in what appears to be a form of support for the nonprofit organization. The Berkowitzes declined to comment and NYHS was unavailable to comment on the specifics arrangement.
The 1997 sale price of the townhouse is not documented in public records, but the buyer was Michael Offen, a financier at Bear Stearns, who renovated and flipped the property within two years to the Berkowitzes for around $5.5 million.
Berkowitz, who was then at Gotham Partners and is now at Riverpark Capital Management, recalled in an interview with Bloomberg that he had to increase his offer and add a carefully tailored sweetener to get the deal done.
“I offered [Offen] to make a $100,000 contribution to a Jewish charity in his name if he sold the place to us, and I think that was what carried the day,” he told the outlet after the home hit the market in January.
The initial asking price for the 25-foot-wide, six-bedroom townhouse was $23 million. Sotheby’s International Realty’s Cathy Taub represented the couple. She declined to comment on the transaction.
NYHS operates the oldest museum in New York City, which was founded in 1804, and is located adjacent to the Upper West Side townhouse. The nonprofit’s president and CEO Louise Mirrer said the organization had not been looking to buy until the sale came to the attention of one of its trustees.
“We saw an opportunity,” she said, noting that the additional space next door to the museum will renovated into classrooms for educational programming, though plans to outfit the building for the organization’s needs are still underway.
She described the purchase as a “major investment” but it’s not the nonprofit’s largest capital expense by any means. As of June 2018, NYHS had nearly $170 million in assets and its fixed assets at cost at the time totalled about $94 million, according to public financial statements.
The sale closed on June 27, days before New York’s new taxes on residential property went into effect on July 1. Mirrer said that saving more than $450,000 (by The Real Deal’s calculations) in closing costs did not drive the purchase, instead it was “to move as quickly as possible to accommodate the needs that we have.”
“We’re very squeezed for space,” she said.