Carver Federal Savings, the largest bank in the U.S. founded and run by African-Americans, has sold its Harlem headquarters for $19.45 million — one of the highest prices ever paid for office and retail space in the neighborhood.
The building occupies a prime spot on the neighborhood’s busiest commercial corridor, according to Crains New York.
Carver has a long history of serving borrowers turned down by other banks. It has occupied the West 125th Street building for 62 years since 1956.
The money from the sale will provide a vital cash infusion to the institution, which regulators say is in “troubled condition” after years of losses, Crains reported.
Carver sold the building to a subsidiary of Gatsby Enterprises, a Midtown real estate investment firm run by Nader Ohebshalom. The new owner will lease space to Carver so its flagship branch can remain open.
Carver said the building’s new owner paid one of the highest prices ever for Harlem office and retail space, Crains reported. Senior management and staffers will move to a new location elsewhere on 125th Street. A Gatsby employee declined to comment when asked about the firm’s plans for the building.
From Crains New York. Story by Aaron Elstein.
Carver CEO Michael Pugh said he is “pleased to have entered into a transaction that further strengthens our capital position and solidifies our commitment to serving Harlem and the Greater New York City area.” He added the sale proceeds would be used to help support small businesses, especially those run by women and minorities.
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Banks like Carver were once their customers’ only option, but as Harlem rebounded in the 1990s, big commercial banks started setting up shop in the neighborhood.
Over the past 30 years three-quarters of the nation’s African-American-owned banks have closed, and Carver nearly succumbed when the financial crisis hit its borrowers especially hard. In 2011 the bank was rescued after Goldman Sachs, Morgan Stanley, Citigroup and Prudential Financial teamed up to invest $55 million.
Institutions like Carver have two missions: to help underserved borrowers and to make money. Carver has done an excellent job on the first part, earning an “outstanding” rating from regulators for serving its communities.
But it has struggled to turn a profit. Over the nine months ended Dec. 31, it posted a net loss of nearly $2.2 million, more than twice as much compared with the previous year. In 2016 federal regulators ordered the bank to come up with a plan to improve its financial performance.
Read more at Crains New York.