Clipper, Anshel Fridman pay $90.7M to Vornado, Sears affiliate for 429-unit dev site in Flatbush

David Bistricer’s Clipper Equity and Anshel Fridman of Nalcorp paid a combined $90.7 million to Vornado Realty Trust and an affiliate of Sears for two properties in Flatbush in two separate transactions where Clipper has filed plans for a total of 429 residential units.

In the larger, Clipper Equity and Nalcorp through the entity Bedford Beverly Acquisitions LLC paid $50.6 million to Vornado Realty Trust through the entity Interprop Bedford L.L.C. for the development parcel at 2360 Bedford Avenue in Flatbush, Brooklyn and corner industrial building at 2359 Bedford Avenue in Flatbush, Brooklyn.
The deal closed on May 9, 2022 and was recorded on May 16, 2022.The two properties have 190,821 square feet of built space and 264,169 square feet of additional air rights for a total buildable of 455,690 square feet according to PincusCo analysis of city data.

In the second deal, Clipper Equity and Nalcorp through the entity Bedford Beverly Acquisitions LLC paid $40.3 million to the Sears affiliate Transformco through the entity Transform Operating Stores LLC for retail building at 2360 Bedford Avenue in Flatbush, Brooklyn and corner industrial building at 2359 Bedford Avenue in Flatbush, Brooklyn.
The deal closed on May 9, 2022 and was recorded on May 16, 2022.

The signatory for Vornado Realty Trust was Steven Borenstein. The signatory for Clipper Equity and Nalcorp was David Bistricer. Anshel Fridman, president of Nalcorp, signed on the acquisition loan. PincusCo previously reported that Clipper filed new building permit applications for a combined 429 units on the blocks.

The signatory for Transformco was D. Scott Carr. The signatory for Clipper Equity and Nalcorp was David Bistricer. Transformco is operating Sears and Kmart stores, according to its press release, “Transformco’s go-forward store strategy for Sears and Kmart is to operate a diversified portfolio consisting of a small number of larger, premier stores with a larger number of small format stores.”

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 2360 Bedford Avenue.

Prior sales and revenue

Prior to this transaction, Pincusco has records that the buyer Clipper Equity purchased three properties in two transactions for a total of $30.7 million and sold one properties in one transactions for a total of $19.5 million over the past 24 months.
The seller Transformco had not purchased any other properties and had not sold any properties over the same time period. The two properties with a total of 190,821 square feet of built space generated revenue of $3.1 million per year or $16 per square foot.

The property

The 2360 Bedford Avenue parcel has frontage of 647 feet and is 460 feet deep with a total lot size of 126,877 square feet. The lot is irregular. The zoning is C4-2 which allows for up to 3.4 times floor area ratio (FAR) for commercial and up to 2.43 times FAR for residential. The city-designated market value for the property in 2022 is $11 million.The most recent loan totaled $10 million and was provided by JPP, LLC on December 10, 2020.

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 received four DOB violations in the last year.

Development

On these lots, there are three active new building construction projects and major alteration projects with initial costs more than $5 million, totaling 577,252 square feet. The largest is a new building project for a 351-unit, 257,310-square-foot R-2 building developed by Clipper Equity with plans filed March 22, 2022 and it has not been permitted yet. The second largest is a new building project for a 299-unit, 188,282-square-foot R-2 building developed by Clipper Equity with plans filed March 21, 2022 and it has not been permitted yet.

The neighborhood

In Flatbush, the bulk, or 47 percent of the 51.8 million square feet of commercial built space are residential elevator buildings, with 1-4 family buildings next occupying 17 percent of the space. In sales, Flatbush has had very little sales volume relative to other neighborhoods with $208.8 million in sales volume in the last two years. For development, Flatbush has near average amount of major developments among other neighborhoods and is the 20th highest in Brooklyn. It had 1 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.

The block

On the tax block of 2360 Bedford Avenue, PincusCo has identified the owners of one of the six commercial properties representing 175,875 square feet of the 175,875 square feet. The identified owner is ESL Investments. There are two active new building construction projects totaling 445,592 square feet. The largest is a 351-unit, 257,310-square-foot R-2 building developed by J Bistricer with plans filed March 22, 2022 and it has not been permitted yet.The second largest is a 299-unit, 188,282-square-foot R-2 building developed by J Bistricer with plans filed March 21, 2022 and it has not been permitted yet.

The majority, or 100 percent of the 175,875 square feet of built space are retail buildings, with development buildings next occupying 0 percent of the space.

The buyer

The PincusCo database currently indicates that Clipper Equity owned at least 24 commercial properties with 4,447,788 square feet and a city-determined market value of $684.4 million. (Market value is typically about 50% of actual value.) The portfolio has $1 billion in debt, with top three lenders as Bank of China, New York Community Bank, and G4 Capital Partners respectively. Within the portfolio, the bulk, or 96 percent of the 4,447,788 square feet of built space are residential elevator properties, with office properties next occupying 4 percent of the space. The bulk, or 67 percent of the built space, is in Brooklyn, with Manhattan next at 33 percent of the space.

Surrounding

Within a 400-foot radius of 2360 Bedford Avenue, PincusCo identified three commercial real estate items of interests occurred over the past 24 months.
Of those three items, two were in new building development. There were one new building permit application and one new building permit. The most recent of these two items was a filing on March 21, 2022 for a 94,654-square-foot R-2 building with 130 residential units at 2359 Bedford Avenue.
One of those three items was a loan which Daniel Turkel borrowed $10.8 million from TriState Capital Bank secured by the 0-square-foot industrial (G7) on Duryea Place on February 9, 2021.

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