Madison Realty Capital is closing in on a deal to buy a pair of vacant warehouses near Industry City for $37 million, adding to its growing portfolio of properties in Brooklyn’s expanding office market.
The Midtown-based investment firm, founded in 2004 by Josh Zegen and Brian Shatz, is in contract to buy the adjacent properties at 341-353 39th Street in Sunset Park, which combine for just shy of 163,000 square feet.
“With this one we have about 1 million square feet of office in Brooklyn,” Zegen told The Real Deal. “They were delivered vacant, which really allows us to start work immediately.”
The price works out to about $227 per square foot for the buildings. The seller the Hampshire Companies out of New Jersey bought the buildings for $18.5 million in 2013 and then began buying out tenants to vacate the properties.
Bob Knakal of Cushman & Wakefield marketed the property on behalf of the Hampshire Companies. He did not return calls for comment.
The 10- and 7-story buildings sit mid-block on 39th Street just a short walk away from the southern edge of Industry City, the 6 million-square-foot complex that’s being repositioned to suit TAMI and manufacturing tenants.
It’s by far the largest project in Brooklyn’s emerging office market, which ranks as the sixth-largest in the country. As of January, Industry City had leased up 2.9 million square feet, according to a tally by TRD of the borough’s biggest office projects.
And the growing popularity of the market has certainly caught the attention of Madison Realty. Last year the company bought a former storage warehouse at 29 Ryerson Street near the Brooklyn Navy Yard for $45 million, followed by the purchase of the former Brooklyn Whale Building in Sunset Park for $82.5 million.
David Falk and Eric Cagner of Newmark Grubb Knight Frank are heading up leasing at the Whale Building, and will do the same at Madison’s new property.