Experiential REIT EPR Properties pays $43.3M to Cayuga Capital for Williamsburg climbing gym building

EPR Properties, a Kansas City-based real estate investment trust that focuses on experiential and entertainment assets, through the entity EPR Fitness, LLC, paid $43.3 million to Cayuga Capital Management (1 Nassau Owner LLC) for the mixed-use building (K2) at 1 Nassau Avenue in Williamsburg, Brooklyn. Cayuga built the building in 2021 which is leased to Vital Climbing Gym.

The deal closed on February 28, 2023 and was recorded on March 16, 2023. The property has 34,538 square feet of built space according to a PincusCo analysis of city data. The sale price per built square foot is $1,253 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.)
Cayuga Capital bought the property on May 5, 2017, for $3.5 million, constructed the building and made an additional payment of $24.8 million to the original seller last month, as PincusCo reported at the time.

The PincusCo database currently indicates that Cayuga Capital Management owned at least 25 commercial properties with 259,833 square feet, 204 residential units and a city-determined market value of $42.2 million. (Market value is typically about 50% of actual value.) The portfolio has $170.4 million in debt, with top three lenders as M&T Bank, Amherst Capital Management, and Bridgeinvest respectively. Within the portfolio, the bulk, or 39 percent of the 259,833 square feet of built space are walkup properties, with elevator properties next occupying 24 percent of the space. The bulk, or 96 percent of the built space, is in Brooklyn, with Queens next at 4 percent of the space.

The property

The parcel has frontage of 194 feet and is 141 feet deep with a total lot size of 31,482 square feet. 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 $2.4 million. The most recent loan totaled $30 million and was provided by Bridgeinvest on December 23, 2021.

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 $625 in ECB penalties and $2,495 in OATH penalties in the last year.

Development

For the tax lot building, it received its initial certificate of occupancy on November 19, 2021. 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 49.7 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 6th highest sale turnover among other neighborhoods in the city with $2.2 billion in sales volume in the last two years. For development, Williamsburg is the 6th most active neighborhood among other neighborhoods. It had 4.4 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. There were three 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 two of the three commercial properties representing 79,538 square feet of the 84,538 square feet. The two identified owners are Cayuga Capital Management and Nash Metalware.
There are no active new building construction projects on this tax block.

The majority, or 59 percent of the 84,538 square feet of built space are industrial buildings, with mixed-use buildings next occupying 41 percent of the space.

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