A&E pays $54.5M to LeFrak for 4 rentals in Gravesend, Sheepshead Bay, part of $250M portfolio

A&E Real Estate Holdings paid $54.5 million to LeFrak for four rental buildings in Gravesend and Sheepshead Bay with a total of 265 units, which are part of $250 million portfolio sale. This is the second group of sales to be recorded. The day before A&E recorded the sale of $81.6 million in acquisitions.

In the first, A&E Real Estate Holdings through the entity 388 Avenue X, LLC paid $17.2 million to LeFrak through the entity Danbury Leasing Limited Partnership for 76-unit residential elevator building (D1) at 388 Avenue X in Gravesend, Brooklyn.
The deal closed on November 7, 2022 and was recorded on November 17, 2022.The property has 74,834 square feet of built space according to PincusCo analysis of city data. The sale price per built square foot is $229 per the PincusCo analysis. (The price per square foot analysis is the transaction price divided by square feet as reported in public records and assumes no air rights have been sold.)

In the second, A&E Real Estate Holdings through the entity 2790 Bragg Street, LLC paid $16.5 million to LeFrak through the entity Nautilus Realty Limited Partnership for 76-unit residential elevator building (D1) at 2790 Bragg Street in Sheepshead Bay, Brooklyn. The deal closed on November 7, 2022 and was recorded on November 17, 2022.The property has 73,000 square feet of built space according to PincusCo analysis of city data. The sale price per built square foot is $225 per the PincusCo analysis. (The price per square foot analysis is the transaction price divided by square feet as reported in public records and assumes no air rights have been sold.)

In the third, A&E Real Estate Holdings through the entity 2625 East 13th Street, LLC paid $15.5 million to LeFrak through the entity Pasadena Leasing Limited Partnership for 77-unit residential elevator building (D1) at 2625 East 13th Street in Sheepshead Bay, Brooklyn. The deal closed on November 7, 2022 and was recorded on November 17, 2022.The property has 72,840 square feet of built space according to PincusCo analysis of city data. The sale price per built square foot is $213 per the PincusCo analysis. (The price per square foot analysis is the transaction price divided by square feet as reported in public records and assumes no air rights have been sold.)

In the fourth, A&E Real Estate Holdings through the entity 3191 Emmons Avenue, LLC paid $8.3 million to LeFrak through the entity Montauk Realty Limited Partnership for 36-unit residential elevator building (D7) at 3191 Emmons Avenue in Sheepshead Bay, Brooklyn. The deal closed on November 7, 2022 and was recorded on November 17, 2022.The property has 35,285 square feet of built space according to PincusCo analysis of city data. The sale price per built square foot is $234 per the PincusCo analysis. (The price per square foot analysis is the transaction price divided by square feet as reported in public records and assumes no air rights have been sold.)

The signatory for LeFrak was Arnold S. Lehman. The signatory for A&E Real Estate Holdings was Alex T. Bruce. The contract was signed April 5, 2022. The Commercial Observer in April 2022 first reported the portfolio was in contract for about $250 million. LeFrak developed some of these buildings, including 2750 Homecrest Avenue in 1959.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer A&E Real Estate Holdings purchased 13 properties in 10 transactions for a total of $1 billion and sold 40 properties in one transactions for a total of $14.2 million over the past 24 months.
The seller LeFrak had not purchased any other properties and sold three properties in three transactions for a total of $81.7 million over the same time period. The former owners according to the Department of Housing Preservation and Development includes Joseph Rooney, head officer and Margaret Broda, officer. The business entities are Estates NY Real Estate Services Llc and Danbury Leasing Limited Partnership. The 74,834-square-foot property generated revenue of $1.5 million or $20 per square foot, according to the most recent income and expense figures.

The property

The 388 Avenue X parcel has frontage of 200 feet and is 100 feet deep with a total lot size of 20,000 square feet. The zoning is R4 which allows for up to 0.75 times floor area ratio (FAR) for residential. The city-designated market value for the property in 2022 is $5 million.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the property since September of 2020. In addition, according to city public data, the property has received one DOB violation and six housing violations in the last year.

Development

There are no active new building construction projects or major alteration projects with initial costs more than $5 million on this tax lot.

The block

On this tax block, PincusCo has identified the owners of one of the four commercial properties representing 74,834 square feet of the 74,834 square feet. The identified owner is LeFrak.
On the tax block, there were two new building construction projects totaling 4,782 square feet. The largest is a one-unit, 2,688-square-foot R-3 building developed by Irina Saks with plans filed December 29, 2016 and permitted April 5, 2018. The second largest is a two-unit, 2,094-square-foot R-3 building developed by Justine Stojowski with plans filed July 29, 2021 and it has not been permitted yet.

the majority, or 100 percent of the 74,834 square feet of built space are elevator buildings, with development buildings next occupying 0 percent of the space.

The seller

The PincusCo database currently indicates that Lefrak owned at least 71 commercial properties in New York City with 11,114,105 square feet and a city-determined market value of $1.5 billion. (Market value is typically about 50% of actual value.) Within the portfolio, the bulk, or 89 percent of the 11,114,105 square feet of built space are elevator properties, with office properties next occupying 9 percent of the space. The bulk, or 54 percent of the built space, is in Queens, with Manhattan next at 32 percent of the space.

The buyer

The PincusCo database currently indicates that A&E Real Estate Holdings owned at least 165 commercial properties in New York City with 13,417,617 square feet and a city-determined market value of $1.5 billion. (Market value is typically about 50% of actual value.) The portfolio has $2.7 billion in debt, with top three lenders as Signature Bank, JPMorgan Chase, and Mesa West Capital respectively. Within the portfolio, the bulk, or 74 percent of the 13,417,617 square feet of built space are elevator properties, with walkup properties next occupying 26 percent of the space. The bulk, or 53 percent of the built space, is in Queens, with Manhattan next at 33 percent of the space.

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