Xiao Jun Chen pays $7.7M to Jackson Group for retail in Sheepshead Bay

Xiao Jun Chen through the entity 1417 Avenue U Holding LLC paid $7.7 million to the Chehebar family’s Jackson Group through the entity 1417 Avenue U LLC for the retail building (K1) at 1411 Avenue U in Sheepshead Bay, Brooklyn.
The deal closed on May 15, 2024 and was recorded on May 23, 2024. The property has 9,346 square feet of built space and 11,454 square feet of additional air rights for a total buildable of 20,750 square feet according to a PincusCo analysis of city data. The sale price per built square foot is $821 and the price per buildable square foot is $370 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 September 6, 2023, for $4.6 million. The signatory for the Jackson Group was Gabriel Chehebar. The signatory for Xiao Jun Chen was Xiao Jun Chen. The contract date was October 12, 2023. The building was formerly occupied by a Duane Reade.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer Xiao Jun Chen purchased one property in one transaction for a total of $2.6 million and sold one property in one transaction for a total of $4.3 million over the past 24 months.
The seller Jackson Group purchased six properties in five transactions for a total of $49.4 million and sold four properties in four transactions for a total of $22.1 million over the same time period.

The property

The retail building in Sheepshead Bay has 9,346 square feet of built space and 11,454 square feet of additional air rights for a total buildable of 20,750 square feet according to a PincusCo analysis of city data. The parcel has frontage of 120 feet and is 145 feet deep with a total lot size of 16,600 square feet. The lot is irregular. The zoning is R5 which allows for up to 1.25 times floor area ratio (FAR) for residential. The city-designated market value for the property in 2022 is $3.3 million.

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 $100 in OATH penalties in the last year.

Development

On the lot, there is one active new building construction project for a 33,191 square-foot 69 building. The project was submitted by Jackson Group and filed by Xiao Jun Chen with plans filed March 12, 2024 and it has not been permitted yet.

The neighborhood

In Sheepshead Bay, The bulk, or 43 percent of the 26.5 million square feet of commercial built space are elevator buildings, with specialty buildings next occupying 17 percent of the space. In sales, Sheepshead Bay has 1.7 times the average sales volume among other neighborhoods with $464.1 million in sales volume in the last two years and is the 14th highest in Brooklyn. For development, Sheepshead Bay has had very little major development activity relative to other neighborhoods.It had 862,871 square feet of commercial and multi-family construction under development in the last two years, which represents 3 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of two of the five commercial properties representing 21,986 square feet of the 32,546 square feet. The two identified owners are Jackson Group and Innab Nawal.
On the tax block, there was one new building construction project filed totaling 33,191 square feet. It is a 33,191 square-foot 69 building submitted by Jackson Group and filed by Xiao Jun Chen with plans filed March 12, 2024 and it has not been permitted yet.

The majority, or 39 percent of the 32,546 square feet of built space are walkup buildings, with mixed-use buildings next occupying 32 percent of the space.

The seller

The PincusCo database currently indicates that Jackson Group owned at least nine commercial properties in New York City with 217,181 square feet and a city-determined market value of $48.7 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 53 percent of the 217,181 square feet of built space are retail properties, with mixed-use properties next occupying 47 percent of the space. The bulk, or 60 percent of the built space, is in Brooklyn, with Queens next at 36 percent of the space.

The buyer

The PincusCo database currently indicates that Xiao Jun Chen owned at least five commercial properties with 40 residential units in New York City with 94,079 square feet and a city-determined market value of $12.1 million. (Market value is typically about 50% of actual value.) The portfolio has $61.1 million in debt, borrowed from East West Bank and Cathay Bank. Within the portfolio, the bulk, or 51 percent of the 94,079 square feet of built space are elevator properties, with office properties next occupying 32 percent of the space. The bulk, or 88 percent of the built space, is in Queens, with Brooklyn next at 12 percent of the space.

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