Empire State Realty Trust pays $26.4M to Mann Group for mixed-use in Williamsburg

Empire State Realty Trust paid $26.4 million to Mann Group for two adjacent buildings at 157 to 161 Wythe Street in Williamsburg, Brooklyn, in two transactions.

The Real Deal reported in February 2022 that ESRT intended to move deeper into the multifamily market.  The REIT’s CFO Christina Chiu said on a 2022 earnings call that the company was looking for multifamily deals where it can “add value,” including those with “some deal complexity” such as recapitalizations, The Real Deal reported.

In the first of these new deals, Empire State Realty Trust through the entity Williamsburg 157-159 Wythe Avenue, L.L.C. paid $15 million to Mann Group through the entity 157-159 Wythe Avenue Owner, LLC for the six-unit mixed-use building (S5) at 157-159 Wythe Avenue in Williamsburg, Brooklyn.
The deal closed on September 14, 2023 and was recorded on September 29, 2023. The property has 8,050 square feet of built space and 893 square feet of additional air rights for a total buildable of 8,937 square feet according to a PincusCo analysis of city data. The sale price per built square foot is $1,863 and the price per buildable square foot is $1,678 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 Mann Group bought the property on July 24, 2019, for $8.5 million. The signatory for Mann Group was Eric Mann. The signatory for Empire State Realty Trust was Thomas P. Durels and Janet Yuan. The contract date was September 14, 2023. Thomas Durels is executive vice president of real estate at ESRT, and Janet Yuan is a tax manager at ESRT.

In the second, Empire State Realty Trust through the entity Williamsburg 161 Wythe Avenue, L.L.C. paid $11.4 million to Mann Group through the entity 161 Wythe Avenue Owner, LLC for the retail building (K2) at 161 Wythe Avenue in Williamsburg, Brooklyn.
The deal closed on September 14, 2023 and was recorded on September 29, 2023. The property has 2,622 square feet of built space and 1,924 square feet of additional air rights for a total buildable of 4,545 square feet according to a PincusCo analysis of city data. The sale price per built square foot is $4,347 and the price per buildable square foot is $2,508 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 11, 2019, for $6.3 million. The signatory for Mann Group was Eric Mann. The signatory for Empire State Realty Trust was Thomas P. Durels and Janet Yuan.

A JLL team composed of Ethan Stanton, Brendan Maddigan, Stephen Palmese, Michael Mazzara and Winfield Clifford brokered this sale. That same team also brokered the Mann Group’s purchase of 157-159 Wythe Avenue in 2019 for $8.5 million.

 

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer Empire State Realty Trust purchased five properties in four transactions for a total of $391.2 million and has no record it sold any properties over the past 24 months.
The seller Mann Group had not purchased any other properties and sold two properties in two transactions for a total of $10.4 million over the same time period. The former owners according to the Department of Housing Preservation and Development includes Eric Mann, head officer and Robert Trezza, site manager. The business entity is 157-159 Wythe Avenue Owner Llc.

The property

The mixed-use building 157-159 Wythe Avenue with 6 residential units in Williamsburg has 8,050 square feet of built space and 893 square feet of additional air rights for a total buildable of 8,937 square feet according to a PincusCo analysis of city data. The parcel has frontage of 49 feet and is 60 feet deep with a total lot size of 2,979 square feet. 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 $1.4 million.

The retail building at 161 Wythe Avenue in Williamsburg has 2,622 square feet of built space and 1,924 square feet of additional air rights for a total buildable of 4,545 square feet according to a PincusCo analysis of city data. The parcel has frontage of 25 feet and is 60 feet deep with a total lot size of 1,515 square feet. 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 $865,000.

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 four housing violations, $350 in OATH penalties, and two housing litigations in the last year.

Development

On the lot, there is one active major alteration construction project for a six-unit, 7,986 square-foot R-2 building. The project was submitted by Benji Kohn with plans filed August 26, 2016 and permitted August 19, 2019.

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 $2.7 billion in sales volume in the last two years. For development, Williamsburg is the 9th most active neighborhood among other neighborhoods. It had 4.2 million square feet of commercial and multi-family construction under development in the last two years, which represents 8 percent of the neighborhood’s built space. There were four pre-foreclosure suit filed among other mixed-use buildings in the past 12 months.

The block

On this tax block, PincusCo has identified the owners of 19 of the 28 commercial properties representing 87,845 square feet of the 127,783 square feet. The largest owner is Wlodzimierz Grzybowski, followed by Mann Group and then L3 Capital.
On the tax block, there was one new building construction project filed totaling 5,391 square feet. It is a 5,391 square-foot mercantile (M) building submitted by Michael Alvandi with plans filed October 14, 2022 and permitted April 3, 2023.

The majority, or 52 percent of the 127,783 square feet of built space are mixed-use buildings, with walkup buildings next occupying 24 percent of the space.

The seller

The PincusCo database currently indicates that Mann Group owned at least 26 commercial properties with 121 residential units in New York City with 139,203 square feet and a city-determined market value of $36.5 million. (Market value is typically about 50% of actual value.) The portfolio has $19.5 million in debt, borrowed from Ladder Capital. Within the portfolio, the bulk, or 48 percent of the 139,203 square feet of built space are walkup properties, with mixed-use properties next occupying 36 percent of the space. The bulk, or 96 percent of the built space, is in Brooklyn, with Manhattan next at 4 percent of the space.

The buyer

The PincusCo database currently indicates that Empire State Realty Trust owned at least 12 commercial properties with 721 residential units in New York City with 7,076,026 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 90 percent of the 7,076,026 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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