The Real Deal New York

Jamestown to buy LIC building from Chetrits for more than $80M, sources say

May 17, 2012 10:30AM
By Adam Pincus

From left: Douglas Harmon, Joseph Chetrit and the Falchi Building (credit: CoStar)

The owner of the Chelsea Market, Jamestown Properties, is in contract to pay more than $80 million for a massive, industrial-style office building in Long Island City, sources familiar with the deal said.

The five-story property — which served as a warehouse for the famed department store Gimbel Brothers until it was converted to an office building in the 1980s — sits at 31-00 47th Avenue and covers an entire city block. The Falchi Building, as it’s called, is jointly owned by the Chetrit Group, headed by Joseph Chetrit, and principals of the Queens-based commercial brokerage Kalmon Dolgin Affiliates, city records show.

Watchmaker Tourneau, Weil Cornell Medical College, and the United Nations are among the tenants who have office space in the nearly fully occupied building.

The off-market sale of the 638,712-square-foot building, which sources say is now in contract, is expected to close in the coming weeks. The exact contract price was not available.

Sources said the Eastdil Secured team of Douglas Harmon, Adam Spies and Kevin Donner, brokered the deal on behalf of the sellers. All of the parties — including the buyers, sellers and brokers — either declined to comment or did not respond to calls seeking comment.

The sale comes as investors and developers are looking with renewed interest at Long Island City. Last month Alma Realty said it would convert a 230,000-square-foot warehouse in the neighborhood to a retail-and-office building. And in March, residential landlord Simon Development Group took title to a 130-unit rental building located a block from Queens Plaza.

In addition, an Israeli investor group is in contract to buy the 1.5-million-square-foot 1 Court Square from SL Green Realty in another deal brokered by Harmon and Spies.

Chelsea Market and the Falchi Building have more than their ownership by Jamestown in common. At one time, they were also both co-owned by real estate investor Irwin Cohen and private equity firm Angelo Gordon. The investors eventually sold off the properties.

And, the Falchi Building has had other well-known owners, starting, of course, with Gimbel Brothers, which bought the building in 1937 for $1.5 million. According to news reports, the building — which is bounded by 31st Street and 31st Place, and 47th and 48th avenues — was bought by an investor group that included developer Larry Silverstein after Gimbel Brothers shuttered in the 1980s. Soon after that it was sold again to Cohen. At that time the Gimbel Brothers warehouse was renamed the Falchi Building for the handbag designer Carlos Falchi, which moved operations there from Manhattan. Angelo Gordon took a stake in the property later.

According to city records, the Chetrit Group purchased the building in 2001 and Kalmon Dolgin joined them in 2005.

Currents asking rents for office space in the building are between $15 per square foot and $20 per foot, data from CoStar Group shows. Floor plates, meanwhile, are nearly 130,000 square feet.

Jamestown’s plans for the property are unclear. But its Chelsea Market has been part of the revitalization of Chelsea and the Meatpacking District.

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