Carlyle pays $20M to Equity Resource, SNL for third of fourth purchase of storage portfolio

Carlyle Group through the entity Ss Nyc Eny, L.L.C. paid $20 million to Equity Resource Investments and SNL Storage through the entity Snl Orix Eny Avenue, LLC for the industrial building (E7) at 1690-1696 East New York Avenue in Brownsville, Brooklyn.
The deal closed on April 12, 2024 and was recorded on April 24, 2024. The property has 61,951 square feet of built space according to a PincusCo analysis of city data. The sale price per built square foot is $322 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 seller bought the property on January 24, 2017, for $2.6 million. The signatory for Equity Resource Investments and SNL Storage was Eggert Dagbjartsson. The signatory for Carlyle Group was Wonjoong Kim. The contract date was November 17, 2023.

This is the third of four storage properties Carlyle Group purchased from Equity Resource Investments and SNL Storage. The other two that they recorded sales for were 145 18th Street in Greenwood Heights, Brooklyn, and 651 Utica Avenue in East Flatbush, Brooklyn. The fourth, which has not been recorded, is the largest property by square feet, 87-16 121st Street in Richmond Hill.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer Carlyle Group purchased 153 properties in 135 transactions for a total of $867.6 million and sold one property in one transactions for a total of $4 million over the past 24 months.
The seller Equity Resource Investments had not purchased any other properties and sold four properties in four transactions for a total of $103.2 million over the same time period. The 61,951-square-foot property generated revenue of $927,406 or $15 per square foot, according to the most recent income and expense figures.

The property

The industrial building in Brownsville has 61,951 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 105 feet and is 183 feet deep with a total lot size of 15,824 square feet. The lot is irregular. The zoning is M1-4 which allows for up to 2 times floor area ratio (FAR) for manufacturing. The city-designated market value for the property in 2022 is $6.4 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 five DOB violations in the last year.

Development

For the tax lot building, it received its initial certificate of occupancy on December 2, 2019.

The neighborhood

In Brownsville, The bulk, or 46 percent of the 28.6 million square feet of commercial built space are elevator buildings, with walkup buildings next occupying 21 percent of the space. In sales, Brownsville has had very little sales volume relative to other neighborhoods with $185.5 million in sales volume in the last two years. For development, Brownsville has 1.5 times the average amount of major developments relative to other neighborhoods and is the 10th highest in Brooklyn. It had 1.7 million square feet of commercial and multi-family construction under development in the last two years, which represents 6 percent of the neighborhood’s built space. There was one pre-foreclosure suit filed among other industrial buildings in the past 12 months.

The seller

The PincusCo database currently indicates that SNL Storage owned at least three commercial properties in New York City with 143,254 square feet and a city-determined market value of $13 million. (Market value is typically about 50% of actual value.) Within the portfolio, the bulk, or 80 percent of the 143,254 square feet of built space are industrial properties, with development properties next occupying 20 percent of the space. The bulk, or 46 percent of the built space, is in Brooklyn, with Bronx next at 35 percent of the space.
The PincusCo database currently indicates that Equity Resource Investments owned at least one commercial property in New York City with 49,629 square feet and a city-determined market value of $2.5 million. (Market value is typically about 50% of actual value.) The portfolio consists of at least a single industrial property. It is located in Bronx.

The buyer

The PincusCo database currently indicates that Carlyle Group owned at least 295 commercial properties with 2,768 residential units in New York City with 3,543,619 square feet and a city-determined market value of $863.7 million. (Market value is typically about 50% of actual value.) The portfolio has $1.2 billion in debt, with top three lenders as Invesco Real Estate, Invesco, and Santander Bank respectively. Within the portfolio, the bulk, or 43 percent of the 3,543,619 square feet of built space are elevator properties, with industrial properties next occupying 21 percent of the space. The bulk, or 46 percent of the built space, is in Brooklyn, with Queens next at 31 percent of the space.

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