A&E pays $97.7M to LeFrak for 6 properties with 444 units in Gravesend, Sheepshead Bay, part of $250M portfolio

A&E Real Estate Holdings paid $97.7 million to LeFrak for 6 properties with a total of 444 units in Gravesend and Sheepshead Bay, the third group of recorded sales that make up a $250 million portfolio.

In the first sale, A&E Real Estate Holdings through the entity 2775 East 12th Street, LLC paid $38.9 million to LeFrak through the entity Bel Air Leasing Limited Partnership for 188-unit residential elevator building (D1) at 2775 East 12th Street in Sheepshead Bay, Brooklyn.
The deal closed on November 7, 2022 and was recorded on November 18, 2022. The property has 194,425 square feet of built space according to PincusCo analysis of city data. The sale price per built square foot is $200 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 3232 Shore Parkway, LLC paid $14.1 million to LeFrak through the entity Arcadia Leasing Limited Partnership for 72-unit residential elevator building (D1) at 3232 Shore Parkway in Sheepshead Bay, Brooklyn.

In the third, A&E Real Estate Holdings through the entity 2411 East 3rd Street, LLC paid $14.1 million to LeFrak through the entity Portland Leasing LLC for 70-unit residential elevator building (D1) at 2411 East 3rd Street in Gravesend, Brooklyn.

In the fourth, A&E Real Estate Holdings through the entity 2611 East 13th Street, LLC paid $13.1 million to LeFrak through the entity Westwood Leasing Limited Partnership for 64-unit residential elevator building (D1) at 2601-2617 East 13th Street in Sheepshead Bay, Brooklyn.

In the fifth, A&E Real Estate Holdings through the entity 444 Avenue X, LLC paid $9.9 million to LeFrak through the entity Newport Leasing Limited Partnership for 50-unit residential elevator building (D1) at 436-444 Avenue X in Gravesend, Brooklyn.

In the sixth, A&E Real Estate Holdings through the entity 410 Avenue X, LLC paid $7.6 million to LeFrak through the entity Plymouth Leasing Property LLC for office building (O7) at 400-416 Avenue X in Gravesend, Brooklyn.

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 17 properties in 14 transactions for a total of $1.1 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 seven properties in seven transactions for a total of $139.1 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 Estates Services Llc and Bel Air Leasing Limited Partnership. The 194,425-square-foot property generated revenue of $3.8 million or $19 per square foot, according to the most recent income and expense figures.

The property

The 2775 East 12th Street parcel has frontage of 301 feet and is 243 feet deep with a total lot size of 48,000 square feet. The lot is irregular. The zoning is R6 which allows for up to 2.43 times floor area ratio (FAR) for residential. The city-designated market value for the property in 2022 is $10.5 million.The most recent loan totaled $9.7 million and was provided by Wells Fargo on July 15, 2021.

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 three DOB violations, $624 in ECB penalties, 23 housing violations, and $974 in OATH penalties 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 three of the three commercial properties representing 388,850 square feet of the 388,850 square feet. The two identified owners are LeFrak and Lay Assets.
On the tax block, there was one new building construction project filed totaling 41,848 square feet. It is a 45-unit, 41,848-square-foot R-2 building developed by Eddie Yair with plans filed May 22, 2020 and permitted August 26, 2021.

The majority, or 100 percent of the 388,850 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 66 commercial properties in New York City with 10,796,146 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 10,796,146 square feet of built space are elevator properties, with office properties next occupying 10 percent of the space. The bulk, or 56 percent of the built space, is in Queens, with Manhattan next at 33 percent of the space.

The buyer

The PincusCo database currently indicates that A&E Real Estate Holdings owned at least 170 commercial properties in New York City with 13,735,576 square feet and a city-determined market value of $1.5 billion. (Market value is typically about 50% of actual value.) The portfolio has $2.8 billion in debt, with top three lenders as Signature Bank, JPMorgan Chase, and Mesa West Capital respectively. Within the portfolio, the bulk, or 75 percent of the 13,735,576 square feet of built space are elevator properties, with walkup properties next occupying 25 percent of the space. The bulk, or 52 percent of the built space, is in Queens, with Manhattan next at 32 percent of the space.

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