Clutter sells East Flatbush storage for $24.8M, second transaction this month for Life Storage

The entity Foster Avenue Self Storage Owner, LLC paid $24.8 million to Clutter through the entity 5601 Foster Ave Storage LLC for the industrial building (E7) at 5601 Foster Avenue in East Flatbush, Brooklyn and industrial building (E7) at 5633 Foster Avenue in East Flatbush, Brooklyn. The properties are new locations for the storage company Life Storage. The day before, in a similar transaction, Clutter sold a building for $27.2 million that is now occupied by Life Storage.
The deal closed on April 14, 2023 and was recorded on April 20, 2023. The two properties have 84,000 square feet of built space according to a PincusCo analysis of city data. The sale price per built square foot is $295 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 Clutter was Rahul Gandhi. The buyer is anonymous behind an LLC. The building is newly listed on Life Storage’s website.

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 5601 Foster Avenue.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer Life Storage purchased three properties in three transactions for a total of $61.9 million and has no record it sold any properties over the past 24 months.
The seller Clutter had not purchased any other properties and sold one properties in one transactions for a total of $27.2 million over the same time period. The two properties with a total of 84,000 square feet of built space generated revenue of $1.7 million per year or $20 per square foot. The sale price per square foot was $295.

The property

The industrial building in East Flatbush has 84,000 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 251 feet and is 200 feet deep with a total lot size of 41,999 square feet. The lot is irregular. The zoning is M1-1 which allows for up to 1 times floor area ratio (FAR) for manufacturing The city-designated market value for the property in 2022 is $9.2 million. The most recent loan totaled $23.8 million and was provided by FS Investments on September 9, 2021.

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 received $1,000 in OATH penalties in the last year.

Development

For the tax lot buildings, one out of the two buildings received a initial certificate of occupancy in the last ten years. 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 East Flatbush, The bulk, or 32 percent of the 42.6 million square feet of commercial built space are elevator buildings, with walkup buildings next occupying 24 percent of the space. In sales, East Flatbush has had very little sales volume relative to other neighborhoods with $228 million in sales volume in the last two years. For development, East Flatbush has 2.3 times the average amount of major developments relative to other neighborhoods and is the 8th highest in Brooklyn. It had 2.3 million square feet of commercial and multi-family construction under development in the last two years, which represents 5 percent of the neighborhood’s built space.

The block

On the tax block of 5601 Foster Avenue, PincusCo has identified the owners of 10 of the 98 commercial properties representing 124,046 square feet of the 445,730 square feet. The largest owner is Yosef Sternberg, followed by Solomon And Joseph Landau Entities and then LIRR.
On the tax block, there were two new building construction projects totaling 36,386 square feet. The largest is a one-unit, 30,238 square-foot storage (S-1) building submitted by Woodmont Development and filed by Simon Neil with plans filed February 24, 2017 and it has not been permitted yet. The second largest is a 6,148 square-foot assembly (A-2) building submitted by Charles Rawlins with plans filed August 5, 2014 and it has not been permitted yet.

The majority, or 81 percent of the 445,730 square feet of built space are industrial buildings, with mixed-use buildings next occupying 10 percent of the space.

The seller

The PincusCo database currently indicates that Clutter owned at least two commercial properties in New York City with 84,000 square feet. The portfolio has $55.7 million in debt, borrowed from Colony Capital and FS Investments. Within the portfolio, all identified are industrial properties. They are all located in Brooklyn.

The buyer

The PincusCo database currently indicates that Life Storage owned at least five commercial properties in New York City with 465,827 square feet. The portfolio has $14.4 million in debt, borrowed from Northwestern Mutual Life Insurance. Within the portfolio, all identified are industrial properties. The bulk, or 75 percent of the built space, is in Queens, with Brooklyn next at 15 percent of the space.

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