Eastern Consolidated Arranges Sale of New York Portfolio
- Mar 17, 2015
The Lee Estate Portfolio, a diamond in the rough consisting of retail and residential buildings and vacant lots in New York City and New York’s Hudson Valley, has found new owners, thanks to Eastern Consolidated. The real estate investment services firm recently orchestrated the $107 million disposition of the assets.
The collection of properties had been owned by the late Myron Leibowitz, known among the locals as Mike Lee, and his late wife, before they became part of the Lee Estate. A joint venture between L3 Capital L.L.C. and ASB Real Estate Investments snapped up the majority of the assets, leaving behind a highly disappointed group of hopeful investors.
“It was a feeding frenzy,” Benjamin Tapper, principal & senior director with Eastern Consolidated, told Commercial Property Executive.
Tapper worked alongside colleague Adelaide Polsinelli, a principal and managing director, on the marketing and selling of the Lee Estate Portfolio. Chris Matousek, director of financial services at Eastern Consolidated, helped bring it all together, acting as analyst on the transaction.
The L3-ASB joint venture shelled out nearly $86 million for the star of the portfolio, the Williamsburg component, which consists of 17 properties in the increasingly popular Williamsburg neighborhood of Brooklyn. “Putting together this much property in such a condensed neighborhood, especially one that’s as valuable as prime Williamsburg, would take somebody years if not decades to collect in the market,” Tapper said.
Located on two blocks bound by N. 6th St., Kent Ave., N. 7th St. and Berry St., the Williamsburg group encompasses 64,000 square feet of existing development–and a whole lot of potential. The offerings include 22 apartments on primarily free-market leases, three professional spaces and of particular note, 10,000 square feet of vacant interconnected retail space and 300 linear feet of retail frontage which is, as Tapper said, “unheard of.”
“The [retail] rents that you’re seeing now in this neighborhood of Williamsburg will more than double the current in-place income, if not potentially triple it,” Polsinelli told CPE. “It’s not something where somebody has to wait five or 10 years to fully unlock the value. There are some steps that can be taken in the immediate term where 12 months from now you can see a dramatically different cash flow snapshot.”
Additionally, the Williamsburg component is zoned to accommodate either 35,000 square feet of air rights for commercial development without inclusionary housing, or 62,000 square feet of development with housing.
The remaining 20 percent of the Lee Estate Portfolio offers its share of upside potential as well. The set of assets includes a 27,000-square-foot grocery store occupying a 71,000-square-foot lot on Linden Blvd. in the East New York neighborhood of Brooklyn. “The site is a little over an acre-and-a-half, which is kind of tremendous for New York City,” Tapper noted.
And there’s more: the 108-acre site in Ulster County in the Mid-Hudson area of the Hudson Valley, and completing the package is a gem in and of itself: a 1,300-square-foot residential penthouse on the Upper East Side of Manhattan. “There are worse places to live,” Tapper joked.
Retail space, multi-family units, a residential penthouse and vacant land in Brooklyn, Manhattan and the Hudson Valley–there won’t be another portfolio like the Lee Estate Portfolio on the market anytime soon.