Heitman pays $63.1M for storage in Midwood, Tremont

Chicago-headquartered Heitman LLC paid $63.1 million to Equity Resources Investments and SNL Storage for a storage building at 1296 East 14th Street in Midwood, Brooklyn, and for a ground lease controlling a storage building at 2036 Webster Avenue in Tremont, Bronx. Heitman was the former construction lender for both properties. The buildings were developed by a partnership of Equity Resources Investments and SNL Storage, but it was unknown what stake SNL Storage held in the assets before the sale.

In the larger transaction, Heitman LLC through the entity Hcf Nyc Brooklyn Self Storage LLC paid $46.9 million to Equity Resources Investments and SNL Storage through the entity Avenue M Snl LLC for the industrial building (E7) at 1296 East 14th Street in Midwood, Brooklyn.
The deal closed on February 14, 2024 and was recorded on February 22, 2024. The property has 96,568 square feet of built space according to a PincusCo analysis of city data. The sale price per built square foot is $485 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 September 13, 2017, for $19 million. The signatory for Equity Resources Investments and SNL Storage was Kurt Spring of Equity Resources Investments. The signatory for Heitman LLC was Jonathan Lindell. The contract date was February 14, 2024.

SNL Storage also uses the name Safe N Lock Self Storage. Marc Sharinn is co-founder and CEO.

Heitman LLC provided a $24.4 million construction loan to SNL Storage in June 2018. Heitman LLC also uses the name Heitman Capital Management.

According to a 2023 suit, 653695/2023, SLN Storage resigned as managing member from at least one of the joint venture projects, but the case does not cite either of these sales. According to the filing, “Following SNL’s resignation as Managing Member of the 2019 Platform Company, an ERI affiliate, ERI/SNL 2018 Holdings LLC, is now the Managing Member of the 2019 Platform Company and, consequently, responsible for the management of the Venture Company that owns the storage facility being built at Austin Place in the Bronx, SNL XXIV, LLC. I note that, like many of the Venture Companies, SNL XXIV, LLC has outside investors-that is, investors not affiliated with either ERI or the SNL group of companies.”

In the second transaction, Heitman LLC through the entity Hcf Nyc Bronx Self Storage LLC paid $16.2 million to Equity Resources Investments and SNL Storage through the entity Snl XIV, LLC for the industrial building (E7) at 2036 Webster Avenue in Tremont, Bronx. The deal closed on February 14, 2024 and was recorded on February 22, 2024. The property has 51,489 square feet of built space according to a PincusCo analysis of city data. The sale price per built square foot is $314 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 July 16, 2018, for $700,000. The signatory for Equity Resources Investments and SNL Storage was Kurt Spring. The signatory for Heitman LLC was Jonathan Lindell. This is an assignment of a ground lease. Heitman LLC provided an $8.7 million construction loan in January 2019.

Prior sales and revenue

Prior to this transaction, PincusCo has no record that the buyer Heitman LLC had purchased any other properties and has no record it sold any properties over the past 24 months.
The seller Equity Resources Investments had not purchased any other properties and had not sold any properties over the same time period.

The property

The industrial building in Midwood has 96,568 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 151 feet and is 200 feet deep with a total lot size of 27,555 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 $13.7 million.

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 $2,600 in OATH penalties in the last year.

Development

For the tax lot building, it received its initial certificate of occupancy on April 10, 2018. 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 Midwood, The majority, or 53 percent of the 19.3 million square feet of commercial built space are elevator buildings, with walkup buildings next occupying 15 percent of the space. In sales, Midwood has 1.6 times the average sales volume among other neighborhoods with $467.6 million in sales volume in the last two years and is the 15th highest in Brooklyn. For development, Midwood has had very little major development activity relative to other neighborhoods.It had 501,984 square feet of commercial and multi-family construction under development in the last two years, which represents 3 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of two of the five commercial properties representing zero square feet of the 231,445 square feet. The identified owner is Fbe Limited.
There are no active new building construction projects on this tax block.

The majority, or 42 percent of the 231,445 square feet of built space are industrial buildings, with specialty buildings next occupying 34 percent of the space.

The seller

The PincusCo database currently indicates that Snl Storage owned at least four commercial properties in New York City with 220,142 square feet and a city-determined market value of $23.3 million. (Market value is typically about 50% of actual value.) Within the portfolio, the bulk, or 87 percent of the 220,142 square feet of built space are industrial properties, with development properties next occupying 13 percent of the space. The bulk, or 65 percent of the built space, is in Brooklyn, with Bronx next at 23 percent of the space.

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