Condensing tank hot water heaters have been around for decades, and were a popular way to do low-temp radiant floor heating back in the 1990s and early 2000s (still are in some quarters.) The Vertex has been around for at least 10 years. The HTP Light Duty is a smaller-burner version of their well-regarded commercial condensing hot water heaters.
Condensing tankless units have been around for about a decade, but Takagi's units are only maybe 50 years old. But if the entering water at the tankless is going to be higher than ~120F or so you won't get much condensing efficiency out of them.
If you set the tank to 130F, you want the tankless to be set to a MINIMUM of 130F + 25F (=155F), but 130F + 45F (=175F) is just fine, even better. Unlike hydronic boilers, these things tolerate very high temperature differences from in-to-out. They are designed handle 35F wintertime incoming water temperatures with 120F output without a problem, which is an 85F delta-T. They aren't very well suited for 110F incoming water with 120F output (a 10F delta-T), where efficiency suffers, and higher flow rates are necessary to keep the burner from flaming out.
With the output of the tankless to only 140F and maintaining the tank at 130F (a 10F delta-T) you'll be running at lower efficiency due to the low temperature difference, and probably a lot more burn cycles too, which lowers the efficiency even further.
Ideally you'd want the controls to turn on a ~2 gpm flow whenever the tank dropped below say, 115F (still plenty hot for filling tubs), but continue until the tank got up to 135F, raising the thermal mass of the tank about 20F. With 50 gallons of water it takes a bit over 8000 BTU to deliver a 20 degree rise. At 2 gpm and an output temp of 165F the burner would be modulating down to 30,000 BTU/hr at the end when the tank hits 135F, but would be firing at 50,000 BTU/hr at the initial turn-on at 115F. During an endless shower pulling the tank temp down to 105F it would be firing at 60,000 BTU/hr, which is enough for a forever-shower if using a low-flow head. If that turns out to be not enough (unlikely), you can crank up the tankless to even higher temps without damaging it.
At an average firing rate of about 40,000 BTU/hr, with the controls set up for a 20 degree rise in the tank you have a guaranteed minimum burn time of about 0.2 hours (12 minutes) to deliver that 8000 BTUs, which translates into far fewer ignition cycles and less wear & tear overall. Error code 11 on a Paloma (and Takagi) would usually be the flame-sensor crudding up, which is partly a function of ignition cycling. Other factors include local air pollution (particularly volatile organics- never install one of these in a hair salon where aerosol hair products are used.)
Drainwater heat exchanger retrofits are dead-easy if it's a plastic drain that has free access and located reasonably close to the water heater. It's more complicated with antique cast-iron tangled up in framing or plumbing. The tallest & fattest one that fits will deliver the most performance, and is worth the marginal uptick in upfront cost.
Most old NYC row houses are heated with either a steam or hydronic boiler. If that's the case for you, running an indirect HW heater as separate zone off the boiler is probably going to be the best bang/buck.