Watermark Capital, partners sign 99-year lease for new dev in East Williamsburg, site valued at $17M

Watermark Capital Group, by the signatory Wolfe Landau, along with partners Joel Wieder, and David Grunfeld, through the entity 225 Seigel LLC, signed a 99-year ground lease with the Roman Catholic Church of Our Lady of the Rosary of Pompei to transform a religious campus at 225 Seigel Street East Williamsburg, Brooklyn, into a residential complex.

A 2026 appraisal for the property set the value of site at $17 million, or $202 per square foot given the stated zoning potential of 83,957 square feet. The church on the property was heavily damaged in a fire in March 2024. The site is across the street from Bungalow Projects massive film studio development.

The lease agreement, dated March 4, 2026, covers the property which currently houses the parish’s church and community center. Under the terms of the deal, the developers plan to demolish the existing structures to make way for a new, multifamily housing project spanning approximately 83,957 zoning square feet.

The ground lease was disclosed in court records because the church is a religious body and under state law such entities are required to obtain a final court order to authorize the leasing or sale of their real property. The lease identified Newmark as the only brokerage involved in the deal.

Case 513862/2026 LINK

The developers paid $2,200,000 in pre-paid fixed net rent on the effective date, which covers the first 24 months following the commencement of the lease. After a two-year rent-free period during the third and fourth lease years, annual payments resume at $1,100,000 in the fifth year. The rent is scheduled to escalate every five years, with a major reset occurring in the 26th lease year. At that point, and again in the 51st and 76th years, the rent will be adjusted to equal 7% of the fair market value of the land.

To ensure the project’s completion, the developers have provided a $1,500,000 standby letter of credit as security for their “Initial Construction” obligations.

The developers intend for the project to be a market-rate and affordable multifamily residential development that leverages current city housing incentives.

In their redevelopment plan, Landau and his partners have the right to allocate approximately 25 percent of the total zoning square feet to affordable and low-income housing programs, such as the Universal Affordability Preference. This strategy is designed to achieve tax abatements under Real Property Tax Law 485-x or its successor programs.

While the residential component is the primary focus, the lease allows for ancillary residential amenities like gyms and laundry rooms, though any inclusion of community facilities or retail space requires the landlord’s prior written consent, which may be withheld at their sole discretion.

Reflecting the Landlord’s status as a religious corporation, the lease includes strict “Catholic covenants” that govern the future use of the site. The developers are prohibited from using the premises for any purpose offensive to the religious or moral principles of the Diocese, specifically banning obscene performances or the sale of cannabis-related products. Furthermore, the lease explicitly forbids the performance of abortions or euthanasia proceedings, as well as the provision of counseling or advertising related to birth control or abortion. The development team is required to commence construction within 12 months of the commencement date and must proceed diligently to complete the project within 36 months.

The property

The property in East Williamsburg has 27,830 square feet of built space and 64,872 square feet of additional air rights for a total buildable of 92,728 square feet according to a PincusCo analysis of city data. The parcel has three buildings with frontage of 300 feet and is 130 feet deep with a total lot size of 38,160 square feet. The lot is irregular. The zoning is R6 which allows for up to 2.43 times floor area ratio (FAR) for residential. The city-designated market value for the property in 2022 is $3.7 million.

Violations and lawsuits

According to city public data, the property has received three DOB violations in the last year.

There were no lawsuits or bankruptcies filed against the property for the past 24 months.

The neighborhood

In East Williamsburg, The majority, or 62 percent of the 17.1 million square feet of commercial built space are industrial buildings, with walkup buildings next occupying 11 percent of the space. In sales, East Williamsburg has near average sales volume among other neighborhoods with $349.5 million in sales volume in the last two years and is the 22nd highest in Brooklyn. For development, East Williamsburg has near average amount of major developments among other neighborhoods and is the 12th highest in Brooklyn. It had 1.8 million square feet of commercial and multi-family construction under development in the last two years, which represents 10 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of one of the six commercial properties representing 167,750 square feet of the 263,750 square feet. The identified owner is NYC Department Of Education. There are no active new building construction projects on this tax block.

The surrounding

Within a 400-foot radius of 225 Seigel Street, PincusCo identified three commercial real estate items of interests occurred over the past 24 months. One of those three items was a sale which Bungalow Projects bought the 17,500-square-foot, one-unit industrial (F4) on 194 Seigel Street for $12 million from Yuk Lau Leung on December 31, 2024. Of those three items, two were loans above $5 million totaling $90.6 million. The most recent of the two was Bungalow Projects in which borrowed $83.4 million from Farallon Capital Management secured by the zero-square-foot, four-unit industrial (Z9) on 215 Moore Street on October 28, 2025.

Direct link to the property’s ACRIS page and link to DOB NOW portal.