Dalan, KKR pays $225M to Bruman Realty for 286-unit elevator in Downtown Brooklyn

Dalan Management and KKR & Co. through the entity Kre Bklyner 260 Gold LLC paid $225 million to Bruman Realty through the entity Gold Street Realty Holdings LLC for 286-unit residential elevator building at 260 Gold Street in Downtown Brooklyn, Brooklyn.
The deal closed on June 9, 2022 and was recorded on June 21, 2022. The property has 257,286 square feet of built space according to PincusCo analysis of city data. The sale price per built square foot is $874 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, a development site, on July 31, 2018, for $60 million. The signatory for Bruman Realty was Joseph Brunner. The signatory for KKR & Co. was Daniel Rudin. The contract date was July 21, 2020, nearly two years ago. Daniel Rudin is managing director at KKR in real estate. The brokers were Lazer Sternhell, Peter Vanderpool and Sarah Mae Selnick of Cignature Realty.

This sale is part of a larger package that Dalan and KKR bought from Bruman, which The Real Deal reported on in 2020.

Prior sales and revenue

Prior to this transaction, Pincusco has records that the buyer KKR & Co. purchased 15 properties in eight transactions for a total of $759.2 million and has no record it sold any properties over the past 24 months.
The seller Bruman Realty purchased one properties in one transactions for a total of $14.4 million and sold 14 properties in seven transactions for a total of $250.7 million over the same time period. The former owner according to the Department of Housing Preservation and Development is Myer Worch, head officer. The business entity is Gold Street Realty Holdings Llc.

The property

The 260 Gold Street parcel has frontage of 186 feet and is 101 feet deep with a total lot size of 27,450 square feet. The lot is irregular. The zoning is C6-2 which allows for up to 6 times floor area ratio (FAR) for commercial and up to 6.02 times FAR for residential. The city-designated market value for the property in 2022 is $37.9 million.The most recent loan totaled $102.5 million and was provided by Square Mile Capital Management on May 21, 2021.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the property since September of 2020. In addition, according to city public data, the property has received $13,125 in ECB penalties, four housing violations, and $18,125 in OATH penalties in the last year.

Development

For the tax lot building, it received its initial certificate of occupancy on September 14, 2012. There are no active new building construction projects or major alteration projects with initial costs more than $5 million on this tax lot.

The neighborhood

In Downtown Brooklyn, the bulk, or 36 percent of the 26.8 million square feet of commercial built space are office buildings, with residential elevator buildings next occupying 29 percent of the space. In sales, Downtown Brooklyn has 1.3 times the average sales volume among other neighborhoods with $365.7 million in sales volume in the last two years and is the 10th highest in Brooklyn. For development, Downtown Brooklyn has 2.9 times the average amount of major developments relative to other neighborhoods and is the 7th highest in Brooklyn. It had 2.6 million square feet of commercial and multi-family construction under development in the last two years, which represents 10 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of two of the 10 commercial properties representing 263,646 square feet of the 284,214 square feet. The two identified owners are Bruman Realty and Anthony Lolli. There is one active new building construction project totaling 14,341 square feet. It is a 13-unit, 14,341-square-foot R-2 building developed by Yisroel Greenfeld with plans filed May 20, 2022 and it has not been permitted yet.

the majority, or 79 percent of the 326,128 square feet of built space are residential elevator buildings, with 1-4 family buildings next occupying 13 percent of the space.

The seller

The PincusCo database currently indicates that Bruman Realty owned at least 15 commercial properties with 591,471 square feet and a city-determined market value of $85.3 million. (Market value is typically about 50% of actual value.) The portfolio has $579.9 million in debt, with top three lenders as Starwood Capital Group, Square Mile Capital Management, and Slate Property Group respectively. Within the portfolio, the bulk, or 51 percent of the 591,471 square feet of built space are elevator properties, with N3 properties next occupying 22 percent of the space. The bulk, or 80 percent of the built space, is in Brooklyn, with Queens next at 13 percent of the space.

Surrounding

Within a 400-foot radius of 260 Gold Street, Pincusco identified three commercial real estate items of interests occurred over the past 24 months.
Of those three items, one was in new building development. It was a new building permit application filed on May 20, 2022 for a 11,268-square-foot R-2 building with 13 residential units at 236 Gold Street.
Of those three items, two were loans above $5 million totaling $115.6 million. The most recent of the two was Lalezarian Properties which borrowed $110 million from New York Community Bank secured by the 326,609-square-foot, 378-unit rental (D7) on 257 Gold Street on June 9, 2021.

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