Recent Transactions: December 2016

Market Report provided by Nest Seekers

Some people have fancy clothes or expensive gadgets in their Christmas list. Others want buildings and properties. With the end of the year fast approaching, here are some transactions that were carried out this month as part of the holiday shopping rush:

1.)   Two Hilton Garden Hotels (Manhattan)

RLJ Lodging Trust has just sold two Hilton hotels—the 298-room Hilton Garden Inn, New York and the 280-room Hilton New York in the Fashion District—for a total of $286 million. RLJ’s decision to sell the two hotels came after a period of market decline.

Ross Bierkan, president and CEO of the company, cites other reasons behind the transaction deal. “Out hotels in New York reported a decline of 4.8 percent,” he said, “In addition to the impact from new supply, our hotels also faced tough year-over-year comparables as we outperformed the market last year.”

2.)   One Boerum Place (Brooklyn)

A team of three investors—Avery Hall, the Aria Development Group, and the Spanish-based Allegra Holdings—purchased One Boerum Place from Brooklyn Law School for $76.5 million. A 40,000 square foot building currently sits there, but future plans involve razing it and then building a 160,000 square foot residential and retail space on the site.

“The building is past its useful life for Brooklyn Law,” said David Carlos, a Savills Studley agent who helped broker the deal, “Given that One Boerum is the gateway to the Fulton Mall, the highest and best use for the site is a retail and residential development – strategically, it just made sense.”

3.)   A&E Real Estate Holdings and Benedict Realty Group Joint Portfolio (Queens)

For $133 million, Ares Management sold a portfolio of 10 buildings across Queens to partners A&E Real Estate Holdings and Benedict Realty Group who plan to hold the properties for the long-term. The transaction was brokered by Rosewood Realty’s Aaron Jungreis while the package is financed by Mesa West Capital and the New York Community Bank. 

Many of these properties are located in working-class neighborhoods like Elmhurst, Woodside, Jackson Heights and Sunnyside. This transaction includes 531 rental apartments that cover 403, 800 square feet with each unit estimated to be around $245,000. 38-05 Crescent Street, a 34-unit building that is also included in the transaction, is located in Long Island City.

4.)   Northeast 10th Street and Northeast First Avenue (Miami)

Miami A/I Parcel 2 Subsidiary LLC sold Northeast 10th Street and Northeast First Avenue to Tower 2 LLC, led by Dan Kodsi, for $26.275 million. This location is the 2.25-acre land site for the Paramount Miami Worldcenter, a $1.7 billion mixed-use project in downtown Miami that is developed by Nitin Motwani and Art Falcone. The building, according to Kodsi, stands at 700 feet with 513 luxury units amounting to $700 per square feet.

“A lot of people still see us a great value for what we’re offering,” Kodsi said with regards to ongoing developments, “Now that we’re going vertical, we’re at a point where we’re maintaining sales.” Kodsi’s project is expected to be completed by the end of 2018 with Paramount located next to the 450,000 square feet Worldcenter’s high street retail space.

The Kodsi-led company also obtained a mortgage worth nearly $13 million as part of the deal.

5.)   Two Riverfront Plaza (New Jersey)

Kuwait-based firm KFH Capital Investment Co. bought Two Riverfront Plaza for $165 million from SJP Properties and Matrix Development. This building—a 337,500 square foot, 12-story office tower—is also where the North American headquarters of Panasonic is located.

"This sale reflects the unparalleled quality of this building - which resulted in tremendous interest among institutional-grade investors from all around the world - as well as Newark's growing reputation as an established hub for global business," said SJP's CEO Steven J. Pozycki.

Jeffrey Dunne of CBRE Institutional Properties who represented the sellers during the transaction also expressed some positive comments. "The sale of Two Riverfront Plaza demonstrates the continued demand for premier office assets in urban lifestyle environments with mass transit connectivity, such as Newark," he said.

6.)   18 Duck Point Road (Hamptons)

Even after the end of summer, the Hamptons continues to see some major purchases as well. In Remsenburg, Southhampton, Olstein Capital Management Chairman, Robert Olstein, has just sold his 6,000 square foot home for $5.5 million. The transaction was brokered by Douglas Elliman’s Enzo Morabito.

The 1.2-acres house—a 6 bedroom and 6.5 bathroom property—was built in 2006, and was designed by Nick Vero. It has its own private boating dock, a heptagon-shaped living room and a beautiful formal dining room. It also features a marble chef’s kitchen and a master bedroom with its own porch.