Greenland Forest City sells retail condos at base of 550 Vanderbilt for $5.8M, after touting "below-market rents." Last FC holding of consequence?
Once Greenland Forest City Partners, which built the 550 Vanderbilt condo tower as a 70/30 joint venture, finally sold the last sponsor-owned residential condo last summer, it finally made sense to sell the three retail condos--one subdivided--at the base of the building.
And they have, for $5.8 million, in a sale first reported by Marketproof. The buyer was Edison Equities, which owns other retail spaces in the city.
There are likely two other reasons. First, Greenland USA is struggling financially, along with its Shanghai-based parent, Greenland Holdings, and likely could use the cash.
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| Van Leewen and Ciao Gloria |
There are likely two other reasons. First, Greenland USA is struggling financially, along with its Shanghai-based parent, Greenland Holdings, and likely could use the cash.
Also, Forest City no longer exists, having been absorbed by Brookfield Properties, which as of November claimed to have a "nominal" interest in the project. Maybe that was after this sale was in process.
What was it worth?
As noted on the Instagram site Traded, the sale price of $5.8 million works out to $825 per square foot for 7,033 square feet.
That may be somewhat below market, though I don't have full comps. Note one 2022 retail sale over $2,000/sf on busy Seventh Avenue in Park Slope and another, over $1,000/sf on perhaps more comparable Fulton Street in Clinton Hill.
Then again, the property does come with a couple of challenges, including the fact that one of the three retail spaces, along Pacific Street at the north side of the building, has been used as a construction field office and might be needed for that again.
If the project is completed, construction nearby--including the platform needed for the Vanderbilt Yard and then adjacent residential towers--could be noisy for that Pacific Street retail space. If the project is not completed, it's in a somewhat awkward spot.
"Below-market rents"
As marketed (on crexi.com) by Marshall Real Estate:
Neither have options to renew, which is perhaps why the listing claimed "below market rents with upside." That said, both tenants, depending on the rent levels, might want to renew.
But the listing does confirm speculation that Greenland Forest City did not get the aggressive rent levels it sought.
According to the listing, the northeast retail space "is leased to Beer Street South, a beautifully built out and designed restaurant and bar, until January 2029 with one 5-year option renewal."
However, the retail unit along Pacific Street is leased to AY Development until July 2024, but can be terminated by either party with a 90-day notice.
Compared to Offering Plan
Another, albeit highly imperfect, comparison is to look at the Offering Plan, which had inflated expectations for residential condo sales.
As noted on the Instagram site Traded, the sale price of $5.8 million works out to $825 per square foot for 7,033 square feet.
That may be somewhat below market, though I don't have full comps. Note one 2022 retail sale over $2,000/sf on busy Seventh Avenue in Park Slope and another, over $1,000/sf on perhaps more comparable Fulton Street in Clinton Hill.
Then again, the property does come with a couple of challenges, including the fact that one of the three retail spaces, along Pacific Street at the north side of the building, has been used as a construction field office and might be needed for that again.
If the project is completed, construction nearby--including the platform needed for the Vanderbilt Yard and then adjacent residential towers--could be noisy for that Pacific Street retail space. If the project is not completed, it's in a somewhat awkward spot.
"Below-market rents"
As marketed (on crexi.com) by Marshall Real Estate:
The Property stretches a full city block between Pacific Street and Dean Street and is 100% leased to 4 different tenants with the flexibility to retain one of the spaces as it is leased on a short-term basis.The listing noted that the southeast retail space is occupied by "Van Leeuwen, a high-end artisanal ice cream parlor," which has a lease until August 2028 and also "Ciao, Gloria LLC, a high-end coffee shop," which has a lease until April 2030.
The property spans a combined 7,033 Square Feet across the ground floor and sits at the base of a newly developed, 278-unit, luxury residential condominium building. Primely located along the highly foot trafficked Vanderbilt Avenue the offering features 15’ ceiling heights and a combined 320’ of wrap-around frontage, including 180’ along Vanderbilt Avenue, 125’ on Pacific Street and 15’ along Dean Street. The Property also benefits from a 25-Year 421a Tax Abatement which does not expire until 2042.
Neither have options to renew, which is perhaps why the listing claimed "below market rents with upside." That said, both tenants, depending on the rent levels, might want to renew.
But the listing does confirm speculation that Greenland Forest City did not get the aggressive rent levels it sought.
According to the listing, the northeast retail space "is leased to Beer Street South, a beautifully built out and designed restaurant and bar, until January 2029 with one 5-year option renewal."
However, the retail unit along Pacific Street is leased to AY Development until July 2024, but can be terminated by either party with a 90-day notice.
Compared to Offering Plan
Another, albeit highly imperfect, comparison is to look at the Offering Plan, which had inflated expectations for residential condo sales.
The full residential buildout was expected to reap $388,570,000, with the residential units owning 97.3597% of the building.
That suggests the full value of the building, with the retail condos, would be $399,107,639 and, on a percentage basis, the retail condos were worth $10,537,639.
But those numbers were aspirational.
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