UAL, Crown, Jackson Group pay $23M to Macy’s for retail in Downtown Brooklyn

UPDATED, 12:20 p.m., December 20, 2024: The Laboz family’s United American Land, the Chera family’s Crown Acquisitions, and the Chehebar family’s Jackson Group through the entity New 422 Boys LLC and 422 Fulton Street Owner II LLC paid $23 million to Macy’s Inc. through the entity Macy’s Brooklyn, LLC for the retail condo at 422 Fulton Street in Downtown Brooklyn, Brooklyn. The expected use is cash flowing.
The deal closed on December 4, 2024 and was recorded on December 19, 2024. The property has 438,498 square feet of built space according to a PincusCo analysis of city data. The sale price per built square foot is $52 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 Macy’s Inc. was Charles P. DiGiovanna. The signatory for United American Land, Crown Acquisitions, and Jackson Group was Isaac Chera and James T. Walther. The contract date was November 4, 2024.

The Real Deal first reported the sale, noting the buyers were United American Land, Jackson Group and Crown Acquisitions. The New York Post reported on the sale earlier this month saying the buyers may convert the Macy’s space to, “experiential entertainment retail.”

As recently as 2020, Macy’s had $66 million in debt on the condo unit. The transfer reports three entities in ownership: New 422 Boys LLC, registered at United American Land with 50%, and 422 Fulton Street Owner LLC with 42.47% and 422 Fulton Street Owner II LLC with 7.53%, both with signatory Isaac Chera of Crown Acquisitions.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer United American Land purchased two properties in two transactions for a total of $11.3 million and has no record it sold any properties over the past 24 months.
The seller Macy’s Inc. had not purchased any other properties and had not sold any properties over the same time period.

The property

The retail condo in Downtown Brooklyn has 451,963 square feet of built space according to a PincusCo analysis of city data. The parcel has a total lot size of 451,963 square feet. The city-designated market value for the property in 2022 is $83.9 million. The most recent loan totaled $18.3 million and was provided by U.S. Bank on October 20, 2020.

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 not received any significant violations in the last year.

Development

For the tax lot building, it received its initial certificate of occupancy on January 28, 2021. 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 22.4 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 1.6 times the average sales volume among other neighborhoods with $412.4 million in sales volume in the last two years and is the 14th highest in Brooklyn. For development, Downtown Brooklyn has 2.9 times the average amount of major developments relative to other neighborhoods and is the 3rd highest in Brooklyn. It had 3.2 million square feet of commercial and multi-family construction under development in the last two years, which represents 14 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of three of the five commercial properties representing 74,025 square feet of the 96,081 square feet. The identified owner is Wharton Properties.
There are no active new building construction projects on this tax block.

The majority, or 64 percent of the 96,081 square feet of built space are retail buildings, with mixed-use buildings next occupying 36 percent of the space.

The seller

The PincusCo database currently indicates that Macy’S Inc. owned at least two commercial properties in New York City with 4,593,612 square feet and a city-determined market value of $620.4 million. (Market value is typically about 50% of actual value.) Within the portfolio, the bulk, or 52 percent of the 4,593,612 square feet of built space are mixed-use properties, with retail properties next occupying 48 percent of the space. The bulk, or 52 percent of the built space, is in Brooklyn, with Manhattan next at 48 percent of the space.

The buyer

The PincusCo database currently indicates that United American Land owned at least 51 commercial properties with 248 residential units in New York City with 974,792 square feet and a city-determined market value of $355.8 million. (Market value is typically about 50% of actual value.) The portfolio has $417.3 million in debt, with top three lenders as Signature Bank, Goldman Sachs, and Israel Discount Bank respectively. Within the portfolio, the bulk, or 37 percent of the 974,792 square feet of built space are mixed-use properties, with elevator properties next occupying 23 percent of the space. The bulk, or 57 percent of the built space, is in Manhattan, with Brooklyn next at 27 percent of the space.
The PincusCo database currently indicates that Jackson Group owned at least eight commercial properties with 33 residential units in New York City with 243,506 square feet and a city-determined market value of $66.1 million. (Market value is typically about 50% of actual value.) The portfolio has $27.8 million in debt, borrowed from Signature Bank and Safra National Bank. Within the portfolio, the bulk, or 42 percent of the 243,506 square feet of built space are mixed-use properties, with retail properties next occupying 41 percent of the space. The bulk, or 47 percent of the built space, is in Brooklyn, with Queens next at 33 percent of the space.
The PincusCo database currently indicates that Crown Acquisitions owned at least five commercial properties with 107 residential units in New York City with 608,432 square feet and a city-determined market value of $555.1 million. (Market value is typically about 50% of actual value.) The portfolio has $11.5 million in debt, borrowed from East West Bank. Within the portfolio, the bulk, or 74 percent of the 608,432 square feet of built space are office properties, with D4 properties next occupying 24 percent of the space. The bulk, or 98 percent of the built space, is in Manhattan, with Brooklyn next at 2 percent of the space.

Correction: A prior version of this post used an outdated measurement for the retail tax lot as 451,963 yielding a price per foot of $50, but the tax lot was updated in through an amended condo declaration filed in July 2024, with a measurement of 438,498 yielding a price per foot of $52.

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