Avanath Capital pays Greenland USA $314.5M for rentals in Prospect Heights

Avanath Capital Management through the entity Avanath B3, LLC and Avanath B14, LLC, paid Greenland USA through the entity Atlantic Yards Puc Venture, LLC $314.5 million for the 303-unit 38 Sixth Avenue and the 298-unit 535 Carlton Avenue in Prospect Heights, Brooklyn in four separate transactions for a series of commercial condominium units. The transactions were entity level, and were not deed transfers.

This sale closed two days after Greenland USA on May 11, filed plans in the neighborhood for a 682-unit, 584,686-square-foot residential building at 698 Atlantic Avenue.
The sale closed on May 13, 2022 and was recorded on June 7, 2022. The 11 commercial condos have 564,607 square feet of built space according to PincusCo analysis of city data. The sale price per built square foot is $557 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.)

Multihousing News first reported the sale of the assets. Including this purchase, Avanath has 1,059 units across 28 properties, according to the report.

Because multiple properties have been transacted, some of the following sections will follow the property with the largest assessed value, which in this case, is the property on 38 Sixth Avenue.

Prior sales and revenue

Prior to this transaction, Pincusco has no record that the buyer Avanath Capital had purchased any other properties and has no record it sold any properties over the past 24 months.
The seller Greenland USA purchased three properties in two transactions for a total of $19.1 million and had not sold any properties over the same time period.

The property

The 38 Sixth Avenue parcel has a total lot size of 157,851 square feet. The property has a 421A exemption that started in 2018.0 and expires in 2054.0. The city-designated market value for the property in 2022 is $23.4 million.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the properties since September of 2020. In addition, according to city public data, the properties have not received any significant violations in the last year.

Development

For the tax lot buildings, one out of the eight buildings received a initial certificate of occupancy in the last ten years. 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 the tax block of 38 Sixth Avenue, PincusCo has identified the owners of three of the eight commercial properties representing 1,123,672 square feet of the 1,685,036 square feet. The largest owner is Principal Global Investors, followed by Brodsky Organization and then Greenland Forest City Partners. There are two active new building construction projects totaling 1,128,303 square feet. The largest is a 858-unit, 808,695-square-foot R-2 building developed by Jon Adamski with plans filed October 5, 2018 and permitted May 4, 2020. The second largest is a 303-unit, 319,608-square-foot R-2 building developed by Robert Sanna with plans filed February 12, 2015 and permitted September 21, 2015.

the majority, or 63 percent of the 1.8 million square feet of built space are residential elevator buildings, with specialty buildings next occupying 37 percent of the space.

Surrounding

Within a 400-foot radius of 38 Sixth Avenue, Pincusco identified two commercial real estate items of interests occurred over the past 24 months.
Of those two items, two were loans above $5 million totaling $151.5 million. The most recent of the two was Brodsky Organization which borrowed $144 million from Athene Annuity And Life Company secured by the 370,789-square-foot, 317-unit rental (D6) on 662 Pacific Street on May 23, 2022.

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