Brookfield closes on purchase from Carmel Partners valued at $115M in FiDi, announced in 2018
Brookfield Properties through the entity OE Crown Holdings II LLC acquired an interest from Carmel Partners through the entity CP Investment IV Reit valued at $115 million for the 156-unit rental property at 15 Cliff Street in Financial District, Manhattan.
The deal closed on December 30, 2021 and was recorded on January 20, 2022.
This is an entity level purchase of the 156-unit residential rental elevator building. The sale was announced in 2018 with a price of $125 million, as part of a portfolio sale by Carmel to Brookfield, totaling $1.9 billion.
The building is divided into four commercial condos, 1001 to 1004. This sale was for units 1002, 1003 and 1004. Units 1002 and 1003 are commercial retail units and 1004 is the residential unit. 1001, which was not part of the sale, is a sub-celler space owned by Rockrose Development, which developed the adjacent building, 99 John Street, into residential condominiums and rentals. Carmel Partners bought 15 Cliff Street from Lalezarian Properties in 2014 for $95 million.
The full recorded price is $115 million, and the real property transfer tax was for 51% of the transfer price. It is possible at the approximate time of the reported transfer in 2018, a minority interest was transferred to Brookfield, and this exchange represents the final 51 percent transfer, though that is speculation.
The three condo units have 150,061 square feet of built space according to PincusCo analysis of city data. The sale price per built square foot is $766 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.)
Prior to this transaction, the buyer Brookfield Properties purchased 16 properties in 13 transactions for a total of $996 million and sold five properties in four transactions for a total of $436 million over the past 24 months.
The seller Carmel Partners had not purchased any other properties and had not sold any properties over the same time period.
One of the projects were to change the building from a J-2 to a R-2 and were permitted on March 17, 2015.
In the Financial District, the majority, or 71 percent of the 85.8 million square feet of built space are office buildings, with residential elevator buildings next occupying 18 percent of the space. In sales, Financial District has the 5th highest sale turnover among other neighborhoods in the city with $1.7 billion in sales volume in the last two years. For development, Financial District has 1.5 times the average amount of major developments relative to other neighborhoods and is the 15th highest in Manhattan. It had 1.3 million square feet of commercial and multi-family construction under development in the last two years, which represents 2 percent of the neighborhood’s built space. There were two pre-foreclosure suit filed among other residential elevator buildings in the past 12 months.
Within a 400-foot radius of 15 Cliff Street, PincusCo identified five commercial real estate items of interests occurred over the past 24 months.
Of those five items, one was for major renovation including a certificate of occupancy change. It was a permit application filed on February 13, 2020 for the $330,000 renovation of 146,990-square-foot R-2 building with 169 residential units at 85 John Street.
Of those five items, four were loans above $5 million totaling $179 million. The most recent of the four was Goldberg Group which borrowed $11 million from Signature Bank secured by the 7,824-square-foot, two-unit mixed-use building (K4) on 34 Cliff Street and one other property on December 20, 2021.
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