An investment group led by Mark Karasick of 601W Companies has made another land grab in Sunset Park, The Real Deal has learned.
Seven months after the firm snagged a 690,000-square-foot industrial lot at 75 20th Street, the group has acquired a two-story industrial building nearby, comprising 201,930 buildable square feet, for $19.5 million.
Jakub Nowak and Hemal Patel of Marcus & Millichap brokered the deal on behalf of the seller.
The property, located at 150 52nd Street between 1st and 2nd Avenues in Brooklyn, has 123,785 square feet of rentable space with a 30,631 square foot, uncovered parking lot. It is currently configured as seven rentals, three on the ground floor and three on the second floor.
All of the leases at the building, which are all at under-market rents, will be expired by 2021, according to an offering memo for the property.
“With short-term leases in place, the property offered investors a unique opportunity to purchase a sizable industrial business park and add significant value by increasing the rent roll over time and capitalizing on the strong and steady growth in local commercial rents,” Nowak said.
The deal was tricky, the brokers said, because of those under-market rents, which made the property “barely financeable.”
“We were quoted a maximum loan of 40 percent on the list price of $16.8 million by major lenders,” Patel said. “Consequently, our prospective buyer pool was limited to buyers who had the capacity to purchase the deal all-cash.”
Meanwhile, Sunset Park is becoming a major draw for investors who typically shied away from deals in such outer-borough neighborhoods.
Last year, Jamestown Properties, the owner of the Chelsea Market, bought a 50 percent stake in Industry City. Several hotels are also slated to open in the area.
“Yield hungry buyers keep pushing the boundaries of their search for value-add opportunities further into the borough,” Nowak said. “Consequently we are seeing surging demand for industrial and commercial assets throughout the Sunset Park Industrial Waterfront.”