FedEx pays $248M to Bridge, DH Property for warehouse property in Sunset Park

FedEx through the entity Federal Express Corporation paid $248 million to Bridge Industrial and Dov Hertz’s DH Property Holdings through the entity Sip Holdings Venture, LLC for the logistics complex (O1) at 75 20th Street in Sunset Park, Brooklyn.
The deal closed on December 28, 2023 and was recorded on January 12, 2024. The property has 332,193 square feet of built space and 1,048,798 square feet of additional air rights for a total buildable of 1,379,998 square feet according to a PincusCo analysis of city data. The sale price per built square foot is $746 and the price per buildable square foot is $179 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 January 10, 2019, for $214.2 million. The signatory for Bridge Industrial and DH Property Holdings was Nick Siegel. The signatory for FedEx was Brandon S. Tolbert. The contract date was December 27, 2023. The Real Deal reported on the purchase.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer FedEx purchased two properties in one transaction for a total of $50 million and has no record it sold any properties over the past 24 months.
The seller Bridge Industrial purchased one property in one transaction for a total of $57 million and had not sold any properties over the same time period. The 332,193-square-foot property generated revenue of $1 million or $3 per square foot, according to the most recent income and expense figures.

The property

The office building in Sunset Park has 332,193 square feet of built space and 1,048,798 square feet of additional air rights for a total buildable of 1,379,998 square feet according to a PincusCo analysis of city data. The parcel has frontage of 160 feet and is 880 feet deep with a total lot size of 689,999 square feet. The lot is irregular. The zoning is M3-1 which allows for up to 2 times floor area ratio (FAR) for manufacturing. The city-designated market value for the property in 2022 is $16 million. The most recent loan totaled $341.7 million and was provided by JPMorgan Chase on November 24, 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 two DOB violations, $36,250 in ECB penalties, and $36,600 in OATH penalties in the last year.

Development

On the lot, there are two new building construction projects and major alteration projects with initial costs more than $5 million, totaling 1,214,050 square feet. The largest is a new building project for a 1,038,742 square-foot S-1 building submitted by Bridge Development Partners and filed by John Porcek with plans filed October 31, 2022 and it has not been permitted yet. The second largest is a new building project for a 175,308 square-foot S-1 building submitted by DH Property Holdings and filed by Dov Hertz with plans filed July 24, 2020 and permitted August 9, 2022.

The block

On this tax block, PincusCo has identified the owners of two of the 11 commercial properties representing 368,972 square feet of the 490,152 square feet. The identified owner is DH Property Holdings.
On the tax block, there were three new building construction projects totaling 1,250,431 square feet. The largest is a 1,038,742 square-foot storage (S-1) building submitted by Bridge Development Partners and filed by John Porcek with plans filed October 31, 2022 and it has not been permitted yet. The second largest is a 175,308 square-foot storage (S-1) building submitted by DH Property Holdings and filed by Dov Hertz with plans filed July 24, 2020 and permitted August 9, 2022.

The majority, or 68 percent of the 490,152 square feet of built space are office buildings, with industrial buildings next occupying 32 percent of the space.

The seller

The PincusCo database currently indicates that DH Property Holdings owned at least four commercial properties in New York City with 40,609 square feet and a city-determined market value of $36.5 million. (Market value is typically about 50% of actual value.) Within the portfolio, the bulk, or 100 percent of the 40,609 square feet of built space are office properties, with development properties next occupying 0 percent of the space. They are all located in Brooklyn.
The PincusCo database currently indicates that Bridge Industrial owned at least one commercial property in New York City with 127,587 square feet and a city-determined market value of $13.4 million. (Market value is typically about 50% of actual value.) The portfolio consists of at least a single industrial property. It is located in Queens.

The buyer

The PincusCo database currently indicates that Fedex owned at least two commercial properties in New York City with 22,935 square feet and a city-determined market value of $5.3 million. (Market value is typically about 50% of actual value.) Within the portfolio, all identified are industrial properties. They are all located in Queens.

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