UPDATED, May 12, 10:30 a.m.: Rabsky Group is expanding its plans for a Downtown Brooklyn skyscraper as big as 770,000 square feet with the recent $68 million purchase of a neighboring property at 633 Fulton Street, sources told The Real Deal.
The Brooklyn development firm, led by Simon Dushinsky and Isaac Rabinowitz, closed Wednesday night on the three-story retail building, which has the addresses of 633-645 Fulton Street and 44-60 Rockwell Place. The purchase allows Rabsky to build a larger ground-up tower, which is expected to contain 150,000 square feet of retail and significant frontage along Fulton Street.
The seller of the 36,000-square-foot property, home to discount store Dollar Deals, is landlord Sam Jemal, sources said. The building is slated for demolition later this year, paving the way for construction to begin.
Joel Gluck’s Spencer Equity is also a partner with Rabsky on the deal. Spencer is investing $28 million, and the remaining $40 million will be provided by two bank loans, according to Tel Aviv Stock Exchange documents. Spencer owns 50 percent of the site, Rabsky 25 percent, and a third partner owns the remaining 25 percent. The purchasing entity will lease the property back to another entity controlled by Spencer Equity for 35 years for price or $2.72 million over two years, the documents show.
Prior to this acquisition, Rabsky was planning a 36-story, roughly 618,000-square-foot office tower on the site at 625 Fulton Street. But the firm is now considering either residential or office as the tower’s primary use, said Tucker Reed, whose new real estate consultancy Totem is a partner on the project. The combined parcels offer 770,000 square feet as-of-right.
“The zoning on the site allows for a lot of flexibility,” Reed said. “This additional piece was very important.”
The site is located just outside of The Prime Fulton Street retail corridor, Between Boerum Place And Flatbush Avenue Extension, where retail rents are the priciest in Brooklyn at an average $326 per square foot, according to a recent Real Estate Board of New York report.
Peter Wolf of Select Real Equity Advisors brokered the deal. Albo Liberis is serving as the architect of record, replacing Eran Chen’s ODA New York last year.
Representatives for Rabsky, Jemal and Wolf could not be reached.
Rabsky struck one of its largest deals to date in January 2016 when it bought the development site at 625 Fulton Street from Forest City Ratner for $158 million. Forest City considered building a residential tower but instead opted to sell.
The developer is also weighing the construction of a hotel on a site along Bedford Avenue in Williamsburg and building a 400,000-square-foot, 500-unit rental on part of the Rheingold Brewery site, for which it secured a $93 million construction loan in December.
Chava Gourarie contributed reporting.