Tankhouse in contract to buy large Gowanus parcel from Pilot Real Estate Group

The development firm Tankhouse through the entity 400 USP LLC signed a contract to buy from Pilot Real Estate Group through the entity 450 Union LLC the likely development site at 452 Union Street in Gowanus, Brooklyn. The sale price was not disclosed in the memorandum of sale agreement that was recorded.
The memorandum was signed on June 24, 2022 and was recorded on July 12, 2022. The property has 9,880 square feet of built space on a 28,500-square-foot lot. The parcel runs along Union Street from Bond Street to the Gowanus Canal.
The seller bought the property on September 9, 2014, for $12.3 million. The memorandum says Tankhouse has already paid $4.065 million to the seller and must pay another $3 million prior to closing. The actual sale price was not disclosed. Erick Schwartz, owner of Pilot, signed for the seller.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer Tankhouse purchased three properties in three transactions for a total of $30.6 million and has no record it sold any properties over the past 24 months.
The seller Pilot Real Estate Group had not purchased any other properties and had not sold any properties over the same time period.

The property

The 452 Union Street parcel has frontage of 80 feet and is 300 feet deep with a total lot size of 28,500 square feet. The lot is irregular. The zoning is M2-1 which allows for up to 2 times floor area ratio (FAR) for manufacturing The city-designated market value for the property in 2022 is $3 million.The most recent loan totaled $9 million and was provided by M&T Bank on December 5, 2019.

Violations and lawsuits

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

Development

For the tax lot building, it received its initial certificate of occupancy on March 3, 2017. On these lots, there is one active new building construction project for a 24-unit, 80,908-square-foot R-2 building. The project was developed by Rob Rieger with plans filed September 24, 2021 and it has not been permitted yet.

The neighborhood

In Gowanus, the bulk, or 46 percent of the 9.5 million square feet of commercial built space are industrial buildings, with residential elevator buildings next occupying 18 percent of the space. In sales, Gowanus has near average sales volume among other neighborhoods with $362.5 million in sales volume in the last two years and is the 14th highest in Brooklyn. For development, Gowanus is the 7th most active neighborhood among other neighborhoods. It had 5.4 million square feet of commercial and multi-family construction under development in the last two years, which represents 57 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of four of the four commercial properties representing 10,600 square feet of the 10,600 square feet. The two identified owners are Robert Rieger and Rabsky Group. There are three active new building construction projects totaling 314,310 square feet. The largest is a 24-unit, 80,908-square-foot R-2 building developed by Rob Rieger with plans filed September 24, 2021 and it has not been permitted yet. The second largest is a 164-unit, 153,506-square-foot R-2 building developed by Rafael Rabinowitz with plans filed January 3, 2022 and it has not been permitted yet.

The majority, or 93 percent of the 10,600 square feet of built space are mixed-use buildings, with industrial buildings next occupying 7 percent of the space.

The buyer

The PincusCo database currently indicates that Tankhouse owned at least four commercial properties in New York City with 62,057 square feet and a city-determined market value of $10.9 million. (Market value is typically about 50% of actual value.) The portfolio has $44.6 million in debt, borrowed from Bank Hapoalim. Within the portfolio, the bulk, or 82 percent of the 62,057 square feet of built space are elevator properties, with office properties next occupying 14 percent of the space. They are all located in Brooklyn.

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