Bungalow Projects, Bain pay $35.1M to Four Points for industrial in Red Hook

Bungalow Projects and Bain Capital Real Estate through the entity Nym 145 Wolcott, LLC paid $35.1 million to Four Points through the entity Red Hook Jv LLC for the industrial building (G2) at 63-79 Ferris Street in Red Hook, Brooklyn, industrial building (G7) at 186-196 Conover Street in Red Hook, Brooklyn, and industrial building (G7) at 184 Conover Street in Red Hook, Brooklyn. The buyers are using the address 145 Wolcott Street.
The deal closed on April 25, 2024 and was recorded on May 1, 2024. The three properties have 24,440 square feet of built space and 136,375 square feet of additional air rights for a total buildable of 160,000 square feet according to a PincusCo analysis of city data. The sale price per built square foot is $1,437 and the price per buildable square foot is $219 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 signatory for Four Points was John D. Gerber. The signatory for Bungalow Projects and Bain Capital Real Estate was Travis Feehan. The contract date was December 12, 2023. The Real Deal reported on the sale earlier this week, noting Susi Yu and Travis Feehan’s Bungalow Projects focuses on television and film studio space.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer Bungalow Projects purchased 11 properties in two transactions for a total of $41.5 million and has no record it sold any properties over the past 24 months.
The seller Four Points had not purchased any other properties and had not sold any properties over the same time period.

The property

The industrial buildings in Red Hook has 24,440 square feet of built space and 136,375 square feet of additional air rights for a total buildable of 160,000 square feet according to a PincusCo analysis of city data. The parcel has frontage of 200 feet and is 400 feet deep with a total lot size of 67,500 square feet. The lot is irregular. The zoning is M2-1 which allows for up to 2 times floor area ratio (FAR) for manufacturing. The city-designated market value for the property in 2022 is $1.7 million. The most recent loan totaled $16.1 million and was provided by Ladder Capital on March 18, 2022.

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

On these lots, there is one active new building construction project for a 210-unit, 300,000 square-foot R-2 building. The project was submitted by Draw Brooklyn and filed by Alexandros Washburn with plans filed October 14, 2020 and it has not been permitted yet.

The neighborhood

In Red Hook, The bulk, or 49 percent of the 9.4 million square feet of commercial built space are industrial buildings, with elevator buildings next occupying 30 percent of the space. In sales, Red Hook has 1.8 times the average sales volume among other neighborhoods with $489.1 million in sales volume in the last two years and is the 13th highest in Brooklyn. For development, Red Hook has had very little major development activity relative to other neighborhoods.It had 810,956 square feet of commercial and multi-family construction under development in the last two years, which represents 9 percent of the neighborhood’s built space.

The block

On the tax block of 63-79 Ferris Street, PincusCo has identified the owners of four of the eight commercial properties representing 34,965 square feet of the 53,316 square feet. The two identified owners are Hilmi Ulgur Aydin and Four Points.
On the tax block, there were two new building construction projects totaling 304,156 square feet. The largest is a 210-unit, 300,000 square-foot residential (R-2) building submitted by Draw Brooklyn and filed by Alexandros Washburn with plans filed October 14, 2020 and it has not been permitted yet. The second largest is a 4,156 square-foot mercantile (M) building submitted by Michel Cohen with plans filed July 3, 2017 and permitted August 7, 2018.

The majority, or 61 percent of the 53,316 square feet of built space are industrial buildings, with office buildings next occupying 21 percent of the space.

The seller

The PincusCo database currently indicates that Four Points owned at least three commercial properties in New York City with 24,440 square feet and a city-determined market value of $2.2 million. (Market value is typically about 50% of actual value.) The portfolio has $16.1 million in debt, borrowed from Ladder Capital. Within the portfolio, all identified are industrial properties. They are all located in Brooklyn.

The buyer

The PincusCo database currently indicates that Bungalow Projects owned at least 11 commercial properties with 150 residential units in New York City with 188,675 square feet and a city-determined market value of $11.3 million. (Market value is typically about 50% of actual value.) Within the portfolio, the bulk, or 64 percent of the 188,675 square feet of built space are hotel properties, with mixed-use properties next occupying 36 percent of the space. They are all located in Brooklyn.

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