Empire State Realty Trust pays $35M to L3 Capital for retail in Williamsburg

Empire State Realty Trust through the entity Esrt 111-115 North 6th Street, L.L.C. paid $35 million to L3 Capital through the entity L3 Berry And N 6 LLC for the retail building (K4) at 111 North 6th Street at the corner of Berry Street in Williamsburg, Brooklyn. The expected use is cash flowing.
The deal closed on October 31, 2024 and was recorded on November 15, 2024. The property has 7,684 square feet of built space and 10,363 square feet of additional air rights for a total buildable of 18,075 square feet according to a PincusCo analysis of city data. The sale price per built square foot is $4,554 and the price per buildable square foot is $1,936 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 26, 2019, for $5.5 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. Hermes signed a retail lease for 10 years with an additional five-year option, which started in February 2022.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer Empire State Realty Trust purchased 11 properties in eight transactions for a total of $301.3 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 13 properties in nine transactions for a total of $188.8 million over the same time period. The 7,684-square-foot property generated revenue of $119,758 or $16 per square foot, according to the most recent income and expense figures.

The property

The mixed-use building with 2 residential units in Williamsburg has 7,684 square feet of built space and 10,363 square feet of additional air rights for a total buildable of 18,075 square feet according to a PincusCo analysis of city data. The parcel has frontage of 72 feet and is 100 feet deep with a total lot size of 6,025 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 $609,000. The most recent loan totaled $20 million and was provided by Wintrust Bank on June 16, 2022.

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 $2,400 in ECB penalties and $4,020 in OATH penalties in the last year.

Development

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 is the 10th most active neighborhood among other neighborhoods. 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 22 of the 28 commercial properties representing 101,803 square feet of the 127,783 square feet. The largest owner is Empire State Realty Trust, followed by L3 Capital and then Maurice Setton.
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 L3 Capital owned at least 22 commercial properties with 27 residential units in New York City with 116,058 square feet and a city-determined market value of $50.8 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 45 percent of the 116,058 square feet of built space are retail properties, with mixed-use properties next occupying 34 percent of the space. The bulk, or 61 percent of the built space, is in Brooklyn, with Manhattan next at 39 percent of the space.

The buyer

The PincusCo database currently indicates that Empire State Realty Trust owned at least 22 commercial properties with 730 residential units in New York City with 7,180,413 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 88 percent of the 7,180,413 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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