Prosper Property Group, partners, pay $48M to Meadow Partners for office in Downtown Brooklyn

Prosper Property Group, Zuccarello Zerillo & Company, and GRA Equities through the entity 57 Will Owner LLC paid $48 million to Meadow Partners through the entity 57 Will Property LLC for the office building (O5) at 57 Willoughby Street in Downtown Brooklyn, Brooklyn. The expected use is cash flowing.
The deal closed on July 31, 2024 and was recorded on August 9, 2024. The property has 104,526 square feet of built space and 60,646 square feet of additional air rights for a total buildable of 165,250 square feet according to a PincusCo analysis of city data. The sale price per built square foot is $459 and the price per buildable square foot is $290 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 December 22, 2016, for $54 million. Meadow signed a loan in 2021 to borrow up to $67.9 million to refinance prior debt and renovate the building.
The signatory for Meadow Partners was Jeffrey Kaplan. The signatory for Prosper Property Group, Zuccarello Zerillo & Company, and GRA Equities was Damien Smith, Peter Zuccarello, and Gary Romaniello. The contract date was May 13, 2024. The Commercial Observer reported on the sale on Friday. Damien Smith entities own 74.5%, Zuccarello owns 20.5%, and Romaniello owns 5%.

The purchase was financed with a $31.2M acquisition loan from Argentic Investment Management.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer Prosper Property Group purchased one property in one transaction for a total of $5.2 million and has no record it sold any properties over the past 24 months.
The seller Meadow Partners purchased 11 properties in six transactions for a total of $142.3 million and sold four properties in three transactions for a total of $86.4 million over the same time period. The 104,526-square-foot property generated revenue of $5 million or $48 per square foot, according to the most recent income and expense figures.

The property

The office building in Downtown Brooklyn has 104,526 square feet of built space and 60,646 square feet of additional air rights for a total buildable of 165,250 square feet according to a PincusCo analysis of city data. The parcel has frontage of 84 feet and is 175 feet deep with a total lot size of 16,525 square feet. The lot is irregular. The zoning is C6-4.5 which allows for up to 12 times floor area ratio (FAR) for commercial The city-designated market value for the property in 2022 is $23.7 million. The most recent loan totaled $8.5 million and was provided by Fortress Investment Group on September 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 $900 in OATH penalties 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 2.7 times the average sales volume among other neighborhoods with $709.6 million in sales volume in the last two years and is the 5th 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 this tax block, PincusCo has identified the owners of four of the five commercial properties representing 1,135,680 square feet of the 1,150,080 square feet. The largest owner is Brookfield Properties, followed by Lonicera Partners and then MDG Design + Construction.
On the tax block, there was one new building construction project filed totaling 227,976 square feet. It is a 290-unit, 227,976 square-foot residential (R-2) building submitted by Lonicera Partners and filed by John Evans with plans filed December 30, 2021 and permitted February 22, 2024.

The majority, or 98 percent of the 1.2 million square feet of built space are office buildings, with elevator buildings next occupying 2 percent of the space.

The seller

The PincusCo database currently indicates that Meadow Partners owned at least 36 commercial properties with 426 residential units in New York City with 1,969,169 square feet and a city-determined market value of $450.2 million. (Market value is typically about 50% of actual value.) The portfolio has $657.3 million in debt, with top three lenders as Fortress Investment Group, Deutsche Pfandbriefbank, and Apollo Global Management respectively. Within the portfolio, the bulk, or 61 percent of the 1,969,169 square feet of built space are office properties, with elevator properties next occupying 15 percent of the space. The bulk, or 68 percent of the built space, is in Manhattan, with Brooklyn next at 32 percent of the space.

The buyer

The PincusCo database currently indicates that Prosper Property Group owned at least three commercial properties with 10 residential units in New York City with 12,284 square feet and a city-determined market value of $3.5 million. (Market value is typically about 50% of actual value.) The portfolio has $5 million in debt, borrowed from Fieldpoint Private Bank & Trust. Within the portfolio, the bulk, or 80 percent of the 12,284 square feet of built space are elevator properties, with mixed-use properties next occupying 20 percent of the space. The bulk, or 80 percent of the built space, is in Queens, with Manhattan next at 20 percent of the space.

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