Empire State Realty Trust pays $17M to L3 Capital for retail in Williamsburg

Empire State Realty Trust through the entity Esrt 92-94 North 6th Street, L.L.C. paid $17 million to L3 Capital through the entity Rs Jz Bedford – N 6th, LLC for the retail building (K2) at 92 North 6th Street in Williamsburg, Brooklyn. The expected use is cash flowing.
The deal closed on October 30, 2024 and was recorded on November 14, 2024. The property has 32,669 square feet of built space according to a PincusCo analysis of city data. The sale price per built square foot is $520 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 December 31, 2013, for $49 million. The signatory for L3 Capital was Domenic Lanni. The signatory for Empire State Realty Trust was Thomas P. Durels. The contract date was July 3, 2024.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer Empire State Realty Trust purchased 10 properties in seven transactions for a total of $284.3 million and has no record it sold any properties over the past 24 months.
The seller L3 Capital had not purchased any other properties and sold 12 properties in eight transactions for a total of $171.8 million over the same time period.

The property

The retail building in Williamsburg has 32,669 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 83 feet and is 100 feet deep with a total lot size of 9,550 square feet. The lot is irregular. The zoning is M1-2/R6A which allows for up to 2 times floor area ratio (FAR) for manufacturing and up to 3 times FAR for residential with inclusionary housing. The city-designated market value for the property in 2022 is $8.5 million. The most recent loan totaled $122.6 million and was provided by JPMorgan Chase on December 31, 2020.

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 two DOB violations in the last year.

Development

For the tax lot building, it received its initial certificate of occupancy on August 24, 2018. 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 Williamsburg, The bulk, or 39 percent of the 50.4 million square feet of commercial built space are elevator buildings, with walkup buildings next occupying 25 percent of the space. In sales, Williamsburg has the 5th highest sale turnover among other neighborhoods in the city with $1.9 billion in sales volume in the last two years. For development, Williamsburg has 4.3 times the average amount of major developments relative to other neighborhoods and is the 2nd highest in Brooklyn. It had 4.6 million 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 this tax block, PincusCo has identified the owners of six of the 16 commercial properties representing 76,643 square feet of the 153,337 square feet. The largest owner is L3 Capital, followed by Empire State Realty Trust and then Mancinifrank.
There are no active new building construction projects on this tax block.

The majority, or 28 percent of the 153,337 square feet of built space are retail buildings, with mixed-use buildings next occupying 25 percent of the space.

The seller

The PincusCo database currently indicates that L3 Capital owned at least 23 commercial properties with 27 residential units in New York City with 148,727 square feet and a city-determined market value of $59.3 million. (Market value is typically about 50% of actual value.) The portfolio has $278.3 million in debt, with top three lenders as JPMorgan Chase, Ladder Capital, and Wintrust Bank respectively. Within the portfolio, the bulk, or 57 percent of the 148,727 square feet of built space are retail properties, with mixed-use properties next occupying 27 percent of the space. The bulk, or 70 percent of the built space, is in Brooklyn, with Manhattan next at 30 percent of the space.

The buyer

The PincusCo database currently indicates that Empire State Realty Trust owned at least 21 commercial properties with 730 residential units in New York City with 7,147,744 square feet and a city-determined market value of $2.2 billion. (Market value is typically about 50% of actual value.) The portfolio has $180 million in debt, borrowed from Morgan Stanley. Within the portfolio, the bulk, or 89 percent of the 7,147,744 square feet of built space are office properties, with elevator properties next occupying 10 percent of the space. They are all located in Manhattan.

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