Atlas Capital pays $202.5M to KKR, Dalan for 365-unit rental in Fort Greene

Atlas Capital Group through the entity Atlas Vi Dekalb LLC paid $202.5 million to KKR & Co. and Dalan Management through the entity Kre Dekalb Owner LLC for the 365-unit residential elevator building (D7) at 80 Dekalb Avenue in Fort Greene, Brooklyn. The expected use is cash flowing.
To finance the acquisition, Atlas Capital Group assumed a $131.5 million loan given by State Street Bank and Trust.
The deal closed on October 10, 2024 and was recorded on October 21, 2024. The property has 335,187 square feet of built space according to a PincusCo analysis of city data. The sale price per built square foot is $604 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 sellers bought the property on July 8, 2022, for $190 million. The signatory for KKR & Co. and Dalan Management was Daniel Rudin. The signatories for Atlas Capital Group were Jeffrey A. Goldberger and Andrew B. Cohen. The contract date was June 3, 2024.

The Real Deal and others reported on the sale yesterday. The Real Deal reported in 2022 that KKR & Co. and Dalan bought the property, in anticipation of continued rising rents, as the city recovered from Covid. Forest City Ratner built the rental housing with 20 percent affordable units.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer Atlas Capital Group purchased 11 properties in one transaction for a total of $142.4 million and has no record it sold any properties over the past 24 months.
The seller KKR & Co. had not purchased any other properties and had not sold any properties over the same time period. The former owners according to the Department of Housing Preservation and Development includes Andrew Wrublin, head officer and Tim Despensa, site manager. The business entities are Dalan Management and Kre Dekalb Owner Llc. The 335,187-square-foot property generated revenue of $15.4 million or $46 per square foot, according to the most recent income and expense figures.

The property

The residential elevator building with 365 residential units in Fort Greene has 335,187 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 203 feet and is 83 feet deep with a total lot size of 13,626 square feet. The lot is irregular. The zoning is C6-4 which allows for up to 10 times floor area ratio (FAR) for commercial and up to 10 times FAR for residential with inclusionary housing. The property has a 421A exemption that started in 2012 and expires in 2037. The city-designated market value for the property in 2022 is $85.3 million.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the property for the past 24 months. In addition, according to city public data, the property has received one DOB violation, one housing violation, and $1,050 in OATH penalties in the last year.

Development

For the tax lot building, it received its initial certificate of occupancy on August 30, 2012. On the lot, there are two active new building construction projects and major alteration projects with initial costs more than $5 million, totaling 802,327 square feet. The largest, 321600380, is a new building project for a 52-unit, 764,352 square-foot R-2 building submitted by Rabsky Group and filed by Simon Dushinsky with plans filed April 29, 2021 and permitted October 31, 2022. The second largest, 321583238, is a new building project for a 37,975 square-foot B building submitted by Rabsky Group and filed by Simon Dushinsky with plans filed June 14, 2017 and permitted November 13, 2020.

The block

On this tax block, PincusCo has identified the owners of two of the three commercial properties representing 1,045,541 square feet of the 1,099,416 square feet. The identified owner is Rabsky Group.
On the tax block, there were two new building construction projects totaling 802,327 square feet. The largest is a 52-unit, 764,352 square-foot residential (R-2) building submitted by Rabsky Group and filed by Simon Dushinsky with plans filed April 29, 2021 and permitted October 31, 2022. The second largest is a 37,975 square-foot business (B) building submitted by Rabsky Group and filed by Simon Dushinsky with plans filed June 14, 2017 and permitted November 13, 2020.

All properties are elevator.

The seller

The PincusCo database currently indicates that Kkr & Co. owned at least four commercial properties with 404 residential units in New York City with 348,065 square feet and a city-determined market value of $62.5 million. (Market value is typically about 50% of actual value.) Within the portfolio, the bulk, or 96 percent of the 348,065 square feet of built space are elevator properties, with M1 properties next occupying 4 percent of the space. They are all located in Brooklyn.

The buyer

The PincusCo database currently indicates that Atlas Capital Group owned at least 16 commercial properties with 1,712 residential units in New York City with 1,493,050 square feet and a city-determined market value of $307.3 million. (Market value is typically about 50% of actual value.) The portfolio has $606.4 million in debt, with top three lenders as Square Mile Capital Management, MF1 Capital, and Arbor Realty Trust respectively. Within the portfolio, the bulk, or 84 percent of the 1,493,050 square feet of built space are elevator properties, with D7 properties next occupying 10 percent of the space. The bulk, or 52 percent of the built space, is in Brooklyn, with Manhattan next at 48 percent of the space.

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