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Deals & Dealmakers

SELLING POINTS: North Shore LIJ buys Carlton building; SL Green consolidates ownership in city buildings

North Shore LIJ buys
Manhasset building

In one of the most expensive deals ever for a Long Island office building, 600 Community Drive in Manhasset, has just been sold by a partnership led by Carlton Group Chairman Howard L. Michaels.
The 252,000 s/f property was sold to North Shore LIJ for an effective purchase price of $65 million, or $260 psf.

600 Community
600 Community

According to sources, North Shore LIJ who was able to use its good credit rating and balance sheet to transact a credit lease financing, allowing it to make a significant profit the day it closed on the building.
North Shore LIJ had been a sub-tenant at the building for the last eight years.
During its sub-tenancy, North Shore LIJ showed no interest in buying or leasing space in the building.
It was not until the building’s master lease, held by United Business Media (UBM) was set to expire on October 31, that the hospital expressed interest in buying the building.
Prior to the deal, the building’s ownership group had won rezoning to lease 80,000 s/f of the building for medical office use while upgrading the property to accommodate a multi-tenant roster.

REIT consolidates interests
in city buildings

SL Green Realty Corp. has acquired additional ownership interests in the office condominium at 1745 Broadway, which is leased entirely to Random House.
SL Green, which originally acquired a 32.26 percent stake in the property in 2007, will increase its ownership percentage to 56.88 percent as a result of the transactions.
The majority of the interests, consisting of general partnership and limited partnership interests, were purchased from The Witkoff Group in exchange for SL Green Operating Partnership units.
By acquiring these interests the company has consolidated management of the property.


Along with partner Prudential Real Estate Investors, the REIT also announced the formation of a joint venture for the ownership of condominium units at Tower 46 (55 West 46th Street).
The units consist of 347,000 s/f with office space on floors 2, 22-34 and retail space at grade on 46th Street.
SL Green announced its acquisition of the newly constructed Class A asset for $295 million in September 2014 and completed that transaction in October 2014.
A fund managed by PREI on behalf of institutional investors now owns a 75 percent stake under the terms of the new joint venture announced today, with SL Green keeping 25 percent ownership and retaining management and leasing responsibilities.

Gurals buy in Bushwick

The Gural family’s real estate investment firm, Newmark Holdings, purchased 7 Bushwick Place in Brooklyn, N.Y., in partnership with KABR Group and Twin Oaks Equity.
The 71,000 s/f building is fully leased to Twin Marquis Inc., which is owned by one of the largest companies in Korea.
“This is an ideal, long-term investment, which is indicative of our real estate strategy,” said Brian Steinwurtzel, one of the managing partners of Newmark Holdings.
“Because 7 Bushwick Place’s rent is below market, it offered a unique chance to purchase a well-located asset with a quality-credit tenant in a burgeoning area at a favorable price.”
Adam Altman, a managing member of KABR Group. “This is a terrific, undervalued Brooklyn asset and we look forward to working as a team to unlock its potential.”
KABR Group and Twin Oaks will be co-managing members with Newmark Holdings. Eric Gural and Steinwurtzel will handle day-to-day management decisions for the property.

Slate stock rising in East Village

Slate Property Group and RWN Real Estate Partners have closed on the $25.9 million purchase of a vacant six-story residential property at 101 East 10th Street in the East Village.
The 31,000 s/f building is located on the northeast corner of Third Avenue and East 10th Street. It was originally built less than 10 years ago as a dormitory for the School of Visual Arts, when the surrounding neighborhood had very little demand for high-end rental apartments.
In under a decade, the East Village has emerged into a premier destination for New Yorkers and the property presents the investors with “an incredible development opportunity,ˮ according to Slate principal, Martin Nussbaum.
“By repositioning the existing building and utilizing the additional 10,000 s/f of air rights to add additional floors above the existing building, we will maximize the building’s value and add to our portfolio of strong long-term rental properties in New York City,” added Nussbaum.
Exclusive agents Victor Sozio, Shimon Shkury and Jesse Deutch of Ariel Property Advisors represented the seller, a real estate investment group, and procured the buyer.
“It’s rare for a newly constructed building in such a prime New York City location to be delivered vacant,” said Sozio, vice president of Ariel Property Advisors. “As a result, the property attracted an enormous amount of interest from operators of condos, rentals, schools, and hotels.”

Cignature sale

Acuity Capital Partners, a Chicago-based private investment firm, has bought six buildings in Upper Manhattan as part of a portfolio containing 102 apartments and 21 retail spaces.
The buildings in the portfolio include: 1697-1707 Amsterdam Avenue in Hamilton Heights, 2500-2504 Adam Clayton Powell Blvd in Harlem and 2090-2092 Amsterdam Avenue in Washington Heights, which is within a few blocks of Columbia Medical Center.
“All the properties have tremendous upside in the rents and many of the apartments have preferential rents which the new owners can capitalize on the first few years,” said Peter Vanderpool, the president of Cignature Realty Associates. The entire portfolio sold for 12.88 times the current rent roll.
Vanderpool and Cignature Realty’s CEO Lazer Sternhell represented both the buyer and the seller, a local real estate investor.

Rugby tackles Newark

Rugby Realty Co., Inc. has acquired Three Gateway Center in Newark, N.J. from Tahl Propp Equities.
Financial terms were not disclosed.


The 579,000 s/f, 19-story office tower is part of the four-tower Gateway indoor complex with its own café, a New York Sports Club, Hilton Hotel, Starbucks, daycare and covered parking.
It is nearby to the Prudential Center, the New Jersey Performing Arts Center, a new Dinosaur BBQ restaurant and a soon-to-be-built Whole Foods supermarket.
Maurice Ades, Rugby Realty’s principal and managing director, noted , “The tower offers tenants … the benefit of state tax incentives that can cut rent expenses in half.”
Rugby Realty will be investing $20 million in the building. The top 10 floors are offering 360,000 s/f are available. Cushman & Wakefield’s Richard Baumstein is leasing agent.

JV purchases hospitality note

New Jersey-based Green Rock Group has formed a joint venture with Embrace Hospitality and Palladium Management to purchase a non-performing note.


David Roth, principal of New York-based Palladium, said the note is collateralized by a 25-acre property in northern Westchester County, and home to the Le Chateau restaurant and catering facility. The unpaid balance was $4.4 million.
Situated on over one million square feet of land in the Hudson Valley hamlet of South Salem, the property features a 12,000 s/f  Tudor-style mansion commissioned in 1907 by J.P. Morgan, and designed by the celebrated architect Grosvenor Atterbury.

LIC development site hits market

Eastern Consolidated has been retained as the exclusive agent to market a residential development site at 22-12 Jackson Avenue in Long Island City, Queens for $53.5 million.
Zoned for 169,500 s/f of residential development, the property at 22-12 Jackson Avenue is ideally situated across from MoMA PS1, down the street from the 1,200,000 s/f development at 5Pointz, and adjacent to the new 182-unit, mixed-use apartment building designed by ODA and developed by Jeff Gershon.
The existing 33,900 s/f lot at 22-12 Jackson Avenue is currently occupied by a taxi company.
“This offering is a tremendous investment opportunity and aligns with the immediate growth pattern of Long Island City’s transformation,” said Ronald A. Solarz, principal and executive managing director at Eastern Consolidated who, along with Chris Matousek, director, Financial Services, exclusively represents the seller, Diamond Service Corporation.

Possibilities limitless at 627 Greenwich

Brack Capital Real Estate has closed on 627 Greenwich Street, a 12-story commercial building in the West Village, for $106 million.


“It is extremely rare to find a vacant building of this size in the West Village,” said Issac Hera, CEO of Brack Capital Real Estate USA. “We are extraordinarily particular about the properties we invest in, considering not only their location, but also their development potential. Fundamentally, this building has great attributes, which lends itself to limitless opportunities.”

627 Greenwich Street is a 106,400 s/f  vacant building located between Leroy and Morton Streets. BCRE projects include citizenM Hotel at 218 West 50th St; The Indigo Hotel at 180 Orchard Street; 189 Bowery Street; 15 Union Square West; 90 West Street; the Element at 555 West 59th Street; The Olcott at 27 West 72nd Street; The Hilton Garden Inn at 63 West 35th Street; and The James New York hotel at 27 Grand Street.

Developer buys Abyssinian church site

The Harlem site of the long-vacant Renaissance Ballroom will soon house a development with over 134 residential units (20 percent of which will be affordable) and community space.
BRP Development Corporation purchased the site from Abyssinian Development Corporation, the development arm of the Abyssinian Baptist Church, and will build the new facility named the “Renny” after the historic ballroom.
“This transformative project will bring new life to an area that has trailed behind prime areas of Harlem in development,” said Meredith Marshall, managing partner at BRP Development Corporation.
“This site has been crumbling for decades, providing no value to the residents of northern Harlem and frankly, they deserve better. We look forward to working with community residents and local leaders to ensure that the Renny is a success.”
Located at 2341-2349 Adam Clayton Powell Boulevard, the development will contain 134 mixed-income residential units; 17,500 s/f of retail space; 20,580 s/f of community facility space; and 67 below-grade parking spaces.
The building is expected to receive LEED Silver certification for its cutting-edge environmental design. Planned “green elements” include solar panels, water saving plumbing systems, energy-efficient boiler and green roofs incorporated in the building’s landscaping. Construction will commence in the first quarter of 2015 and is expected to be completed in 2017.

Partners own the block

Madison Realty Capital (MRC), an institutionally backed real estate private equity firm, acquired three mixed-use Harlem buildings, in partnership with RWN Real Estate Partners LLC (RWN) for $15.2 million in an off-market transaction.

2049-2059 Frederick Douglasss Blvd.

With this acquisition and a previous $30 million multi-property deal in July of this year, MRC and RWN have taken ownership of the entire block between 111th and 112th Streets on the west side of Frederick Douglass Boulevard.

Josh Zegen, Co-Founder and Managing Principal of MRC and Ari Shalam, Managing Principal of RWN, made the announcement. Steven Vegh, President of Westwood Realty Associates, represented the seller and the purchasers in this off-market transaction.
MRC and RWN acquired 2049, 2051, and 2059 Frederick Douglass Boulevard for $15.2 million.  Together, the three buildings located between 111th and 112th Streets comprise approximately 30,000 square feet, including 34 residential units and 3 ground floor retail units, and offer nearly 16,000 square feet of additional residential development rights.
In July of this year, MRC and RWN acquired 2053 Frederick Douglass Boulevard and 300 West 112th Street, two 5-story mixed-use elevator buildings together comprising 55,000 square feet, 50 residential units, and two retail units totaling approximately 3,750 square feet, and offering 30,000 square feet of additional residential development rights.

Partners own the block

EXR Group, a new Williamsburg-based brokerage launched this year, is listing 143 Skillman in East Williamsburg for $15 million.

143 Skillman
143 Skillman

The eight-story mixed-use building is located between Manhattan Avenue and Graham Avenue. It is built 50 feet by 50 feet on floors two through eight, and 50 feet by 100 feet on the first floor. The property is zoned R6B.
It has 19 apartment units and one community facility space currently leased to a language school. The property features nine parking spaces, a laundry room, small on-site gym space, and a large outdoor patio on the second floor.


Port warehouse sold

A 317,500 s/f manufacturing and warehouse building at 11 Cragwood Road has traded for $25.2 million, announced commercial real estate services firm Cushman & Wakefield.
CenterPoint Properties acquired the property from a joint venture of Ivy Equities and CenterSquare Investment Management; Cushman & Wakefield’s Metropolitan Area Capital Markets Group orchestrated the transaction.
Situated on nearly 20 acres in the heart of New Jersey’s Port Region industrial market, 11 Cragwood Road has been fully leased to Gentek Building Products since the 1970s.


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