A small office building in Harlem has just become the first detached building in New York to go public.
The otherwise modest 18,759 square foot retail and office building at 286 Lenox Ave. – whose three tenants include a Wells Fargo branch near the corner of West 125th Street – quietly began trading in the over-the-counter markets last week.
This is the first time a building in New York has been securitized and offered to all investors through the secondary market, according to Jesse Daugherty, co-founder and co-CEO of Lex Markets, which managed the offering.
“The stock has been trading since Wednesday, but we haven’t released any of it publicly beyond notifying our users that trading was open, which we had a duty to do,” Daugherty told the Post. “We … have decided to close the IPO so that investors can start trading.”
On Monday, the thinly traded stock, which trades under the ticker symbol TESLU, was recently at $250, giving the building a market capitalization of more than $11 million.
After being offered at $250, the stock climbed as high as $255 on Thursday and fell to $241 on Friday before falling back to $250 on Monday afternoon. Only 57 shares had been traded Monday afternoon out of 7,133 shares outstanding.
According to the company, owners of commercial real estate can use the Lex platform to raise capital by securitizing part of their property. This allows them to recapitalize their equity and withdraw cash while collecting management fees. At the same time, members of the public can invest in unique assets without being accredited investors.
Meanwhile, shares of a 600-space parking lot in Portland, Maine, which went live in March 2021 under the ticker symbol GWYGU are also down after trading at a high of $253.60. right after its IPO at a current price of $241. Lex is also preparing to issue stock for a retail apartment building in Seattle.