Jay Group pays $75M to Pearl Realty for 405K sf dev site in Downtown Brooklyn

Jacob Kohn’s Jay Group through the entity 102 Fleet Realty LLC paid $75 million to Jack Guttman’s Pearl Realty Management through the entity 147 Prince Street LLC for the six-parcel development site at 102 Fleet Place and 275 Flatbush Avenue Extension in Downtown Brooklyn. The expected use is ground up development. The former use was a surface parking lot and a single-story commercial. The sale occurred in three transactions, one for $50 million for the northern four lots, another for $12.5 million for the two southern lots, and an air rights transfer from 147 Pearl Street for $12.5 million.

Jay Group financed the purchase with a $49.5 million loan from G4 Capital Partners.
The deal closed on August 28, 2024 and was recorded on August 30, 2024. The sale price per buildable square foot, 405,147 square feet, is $185 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 Pearl Realty Management was Alan Weiss. The signatory for Jay Group was Jacob Kohn. The contract date was June 21, 2024. In addition to the property sales, Jay Group paid $12.5 million for 127,559 square feet, or $99 per foot, for air rights from the excess development rights Pearl Realty has. Jay Group has 277,588 square feet as of right on the tax lots it bought, and it bought 127,559 square feet from Pearl Realty from the building 147 Prince Street for a total of 405,147 square feet.

Prior sales and revenue

Prior to this transaction, PincusCo has no record that the buyer Jay Group had purchased any other properties and has no record it sold any properties over the past 24 months.
The seller Pearl Realty Management had not purchased any other properties and sold four properties in three transactions for a total of $176.1 million over the same time period.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the properties for the past 24 months. In addition, according to city public data, the properties have not received any significant violations 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 Downtown Brooklyn, The bulk, or 40 percent of the 22.6 million square feet of commercial built space are office buildings, with elevator buildings next occupying 24 percent of the space. In sales, Downtown Brooklyn has 2.3 times the average sales volume among other neighborhoods with $609.6 million in sales volume in the last two years and is the 8th highest in Brooklyn. For development, Downtown Brooklyn has 3.5 times the average amount of major developments relative to other neighborhoods and is the 3rd highest in Brooklyn. It had 3.8 million square feet of commercial and multi-family construction under development in the last two years, which represents 17 percent of the neighborhood’s built space.

The block

On the tax block, PincusCo has identified the owners of eight of the nine commercial properties representing 65,597 square feet of the 65,597 square feet. The largest owner is Pearl Realty Management,  and then NYCT.
On the tax block, there was one new building construction project filed totaling 24,111 square feet. It is a 20-unit, 24,111 square-foot residential (R-2) building submitted by Charles Dubroff with plans filed May 26, 2016 and it has not been permitted yet.

The seller

The PincusCo database currently indicates that Pearl Realty Management owned at least 69 commercial properties with 10 residential units in New York City with 1,142,517 square feet and a city-determined market value of $158.2 million. (Market value is typically about 50% of actual value.) Within the portfolio, the bulk, or 61 percent of the 1,142,517 square feet of built space are industrial properties, with office properties next occupying 20 percent of the space. The bulk, or 74 percent of the built space, is in Brooklyn, with Bronx next at 18 percent of the space.

The buyer

The PincusCo database currently indicates that Jay Group owned at least seven commercial properties in New York City with 54,642 square feet and a city-determined market value of $9.2 million. (Market value is typically about 50% of actual value.) The portfolio has $387.9 million in debt, with top three lenders as Bank Hapoalim, G4 Capital Partners, and Affinius Capital respectively. Within the portfolio, the bulk, or 63 percent of the 54,642 square feet of built space are industrial properties, with specialty properties next occupying 37 percent of the space. The bulk, or 58 percent of the built space, is in Manhattan, with Brooklyn next at 42 percent of the space.

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