The Real Deal New York

Thor, Salvation Army at impasse over $36M Williamsburg deal

Sitt's firm inked contract in 2015 for Bedford Avenue retail dev site, but has yet to close

March 18, 2016 03:15PM
By Rey Mashayekhi

180 Bedford Avenue

180 Bedford Avenue in Williamsburg (inset: Joe Sitt)

Thor Equities’ pending $36 million deal for a Williamsburg site expected to house a two-story retail building in the heart of the Bedford Avenue corridor has hit a wall, The Real Deal has learned. Thor’s acquisition of the property from the Salvation Army has yet to close nearly a year after the two sides reached an agreement.

The Bryant Park-based real estate investment and development firmTRData LogoTINY, led by Joseph Sitt, entered contract to acquire 180 Bedford Avenue for $36.1 million in spring 2015, as The Real Deal first reported. Thor has since drawn up plans for a new 14,500-square-foot retail building on the parcel, which is located on the corner of North 7th Street and just steps away from the Bedford Avenue subway stop served by the L train.

But the deal is in jeopardy, sources told The Real Deal, with the two sides reaching an impasse over unspecified terms in the contract. While detailing its plans for the property on its website, Thor has yet to file a permit application with the city’s Department of Buildings and the transaction has yet to hit city property records.

Neither Thor nor the Salvation Army, which previously operated a thrift store on the now-vacant site, would comment on the matter. The dispute may be related to the financials of the previous agreement, with Thor having agreed to a fee considered pricey even by Manhattan retail standards.

The property at 180 Bedford Avenue sits on “the busiest corner in central Williamsburg,” according to Thor’s website. The site boasts 60 feet of frontage on both Bedford Avenue and North 7th Street, and Thor’s plans for the site feature a two-story building holding 4,000 square feet of retail on each of the ground, lower, and second floors, plus a 2,500-square-foot rooftop space.

Thor is understood to have asked rents approaching $450 per square foot for the retail space at 180 Bedford – a significant number even for what has become Brooklyn’s premier retail corridor. Retail asking rents on Bedford Avenue, between Grand and North 12th streets, are the most expensive in the borough at an average of $347 per square foot, according to the Real Estate Board of New York’s inaugural Brooklyn retail report last fall.

But there has been speculation that the city’s possible forthcoming shutdown of the L train, which would cut off service on the line between Manhattan and Brooklyn for up to and exceeding an entire year, could significantly and negatively impact such rents in the near term.

It could not be confirmed, however, whether the possibility of the L train’s closure has played a part in Thor and the Salvation Army’s inability to close the deal over 180 Bedford Avenue.

If the deal were to fall through, it would join the 24-building Caiola multifamily portfolio as another contract signed by Thor in early 2015 that didn’t pan out. Fairstead Capital and Blackstone Group closed on the purchase of the portfolio instead, in September 2015, for $690 million. Sources said Fairstead and Blackstone are now exploring their options to sell it, likely in tranches.