GAIA Real Estate pays $80M to Hope Street for three properties in Williamsburg

GAIA Real Estate Holdings through the entity CNA 55 Hope LLC paid $80 million to Hope Street Capital through the entity 53 Hope Street LLC for the 117-unit residential elevator building (D6) at 53 Hope Street in Williamsburg, Brooklyn, industrial building (G7) at 67 Hope Street in Williamsburg, Brooklyn, and another parcel (G7) on Hope Street in Williamsburg, Brooklyn.
GAIA Real Estate through the entity CNA 55 Hope LLC as borrower signed an acquisition loan with lender Raymond James Bank valued at $50 million.
The deal closed on August 23, 2022 and was recorded on September 13, 2022. The three properties have 120,582 square feet of built space and 17,700 square feet of additional air rights according to PincusCo analysis of city data. The sale price per built square foot is $663 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 signatory for Hope Street Capital was Robert Gershon. The signatory for GAIA Real Estate Holdings was David Kusy.

Because multiple properties have been transacted, some of the following sections will follow the property with the largest assessed value, which in this case, is the property on 53 Hope Street.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer GAIA Real Estate Holdings purchased four properties in four transactions for a total of $48.8 million and has no record it sold any properties over the past 24 months.
The seller Hope Street Capital purchased two properties in two transactions for a total of $61.6 million and sold one property in one transaction for a total of $85 million over the same time period. The former owners according to the Department of Housing Preservation and Development includes Robert Gershon, head officer and Melvin Gershon, officer. The business entities are C. Gershon Company and 53 Hope Street Llc. Out of the three properties, one with a total of 120,582 square feet of built space generated revenue of $5.5 million per year.

The property

The 53 Hope Street parcel has frontage of 150 feet and is 163 feet deep with a total lot size of 20,313 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 $28.4 million.The most recent loan totaled $34.4 million and was provided by Berkshire Residential Investments on December 21, 2020.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the properties since September of 2020. In addition, according to city public data, the properties have not received any significant violations in the last year.

Development

For the tax lot buildings, one out of the three buildings received an initial certificate of occupancy in the last ten years. There are no active new building construction projects or major alteration projects with initial costs more than $5 million on this tax lot.

The block

On the tax block of 53 Hope Street, PincusCo has identified the owners of 14 of the 22 commercial properties representing 173,672 square feet of the 194,247 square feet. The largest owner is Hope Street Capital, followed by Paul Henry and then Manjula Mukhopadhyay.
There are three active new building construction projects totaling 111,365 square feet. The largest is a 123-unit, 97,915-square-foot R-2 building developed by Christopher Todd with plans filed August 11, 2020 and permitted March 7, 2022. The second largest is a two-unit, 8,092-square-foot R-3 building developed by Thomas Finnican with plans filed August 4, 2015 and permitted April 19, 2017.

The majority, or 62 percent of the 194,247 square feet of built space are elevator buildings, with mixed-use buildings next occupying 31 percent of the space.

The seller

The PincusCo database currently indicates that Hope Street Capital owned at least eight commercial properties in New York City with 418,514 square feet and a city-determined market value of $56.1 million. (Market value is typically about 50% of actual value.) The portfolio has $184.3 million in debt, borrowed from Square Mile Capital Management and Slate Property Group. Within the portfolio, the bulk, or 86 percent of the 418,514 square feet of built space are elevator properties, with M1 properties next occupying 10 percent of the space. The bulk, or 96 percent of the built space, is in Brooklyn, with Bronx next at 4 percent of the space.

The buyer

The PincusCo database currently indicates that GAIA Real Estate Holdings owned at least four commercial properties in New York City with 47,807 square feet and a city-determined market value of $18.3 million. (Market value is typically about 50% of actual value.) Within the portfolio, all identified are walkup properties. They are all located in Manhattan.

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