Avdoo & Partners signs contract with S.J. Fuel Co. to buy dev site in Gowanus

Avdoo & Partners Development through the entity Union Street Owner LLC as buyer signed a contract with S.J. Fuel Co. through the entity 601 Union Street Realty Corp as seller for the industrial buildings (G1) at 601 and 607 Union Street in Gowanus, Brooklyn. The sale price was not disclosed.
The memorandum of contract was signed on October 16, 2023 and was recorded on November 2, 2023. The properties have 22,699 square feet of built space and 127,469 square feet of additional air rights for a total buildable of 150,208 square feet according to a PincusCo analysis of city data.
The signatory for S.J. Fuel Co. was Peter D’Arco. The signatory for Avdoo & Partners Development was Shlomo Avdoo. S.J. Fuel Co. executive was identified in a fuel-theft indictment disclosed in 2016.

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 607 Union Street.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer Avdoo & Partners Development purchased eight properties in four transactions for a total of $64.5 million and sold one property in one transaction for a total of $13.1 million over the past 24 months.
The seller S.J. Fuel Co. had not purchased any other properties and had not sold any properties over the same time period.

The property

The industrial building in Gowanus has 22,699 square feet of built space and 127,469 square feet of additional air rights for a total buildable of 150,208 square feet according to a PincusCo analysis of city data. The parcel has frontage of 190 feet and is 110 feet deep with a total lot size of 21,054 square feet. The zoning is M1-4/R7A which allows for up to 2 times floor area ratio (FAR) for manufacturing and up to 4 times FAR for residential with inclusionary housing. The city-designated market value for the property in 2022 is $2.3 million.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the properties for the past 24 months. In addition, according to city public data, the properties have not received any significant violations in the last year.

Development

There are no active new building construction projects or major alteration projects with initial costs more than $1 million on this tax lot.

The neighborhood

In Gowanus, The bulk, or 46 percent of the 9.2 million square feet of commercial built space are industrial buildings, with elevator buildings next occupying 19 percent of the space. In sales, Gowanus has 2 times the average sales volume among other neighborhoods with $708.9 million in sales volume in the last two years and is the 7th highest in Brooklyn. For development, Gowanus is the 9th most active neighborhood among other neighborhoods. It had 4.3 million square feet of commercial and multi-family construction under development in the last two years, which represents 47 percent of the neighborhood’s built space. There were two pre-foreclosure suit filed among other industrial buildings in the past 12 months.

The block

On the tax block of 607 Union Street, PincusCo has identified the owners of two of the 16 commercial properties representing 39,780 square feet of the 122,107 square feet. The two identified owners are Three Wall Capital and Avery Hall Investments.
On the tax block, there were three new building construction projects totaling 196,839 square feet. The largest is a 193-unit, 161,490 square-foot residential (R-2) building submitted by Avery Hall and filed by Alexander Cutrona with plans filed December 8, 2021 and permitted May 23, 2022. The second largest is a 76-unit, 18,962 square-foot hotel/dormitory/shelter (R-1) building submitted by Alec Shtromandel with plans filed March 4, 2013 and permitted August 7, 2014.

The majority, or 51 percent of the 122,107 square feet of built space are hotel buildings, with industrial buildings next occupying 32 percent of the space.

The buyer

The PincusCo database currently indicates that Avdoo & Partners Development owned at least 12 commercial properties with 75 residential units in New York City with 135,444 square feet and a city-determined market value of $27.2 million. (Market value is typically about 50% of actual value.) The portfolio has $78.1 million in debt, with top three lenders as Bank Leumi, Valley National Bank, and Kearny Bank respectively. Within the portfolio, the bulk, or 26 percent of the 135,444 square feet of built space are retail properties, with mixed-use properties next occupying 25 percent of the space. They are all located in Brooklyn.

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