The Real Deal New York

Hager shopping W’burg site of planned Trader Joe’s: sources

Sale would mark the second time the property has traded since the chain inked a lease agreement in 2015
By Will Parker | February 24, 2017 06:44PM

trader-joes-web

206 Kent Avenue

Isaac Hager’s Cornell Realty Management filed plans Friday for a new, six-story building in Williamsburg, but would prefer to sell the site, sources told The Real Deal.

The long-stalled waterfront site at 200-206 Kent Avenue is supposed to become the home of a new Trader Joe’s, which signed an 18,000-square-foot lease with the previous owner, Mike Kohn’s Alliance Private Capital Group, in 2015.

Kohn sold the property to the Hagers for $33 million last year, putting the plans for the popular discount grocery store in doubt. Curiously, it was the Hagers who first sold the property to Kohn. Now on their second round of ownership, the Hagers are looking to get out of the development altogether and quietly shopping it around to prospective buyers, sources said.

The cost and difficulty of digging a parking garage on the near-waterfront site is a contributing factor in the Hagers’ decision to court buyers, sources familiar with the matter said.

As for the new construction plans filed with the Department of Buildings Friday, they’re likely meant to help out whoever buys the property, a source said, making the deal more attractive as new owners won’t have to start the permits process from scratch. The property is located just south of North 3rd Street, around the corner from Kushner Companies’ TRData LogoTINY Austin Nichols House condominium conversion.

Hager did not respond to requests for comment about plans for the site. A publicist for Trader Joe’s declined a similar request. A broker familiar with the Trader Joe’s lease said that the grocery chain has been “annoyed” with press coverage of the Williamsburg deal.

Multiple sources said Hager should profit in a potential sale. One considered Hager’s $33 million purchase from Kohn a steal because Kohn was facing pressure from lenders at the time. Records indicate that a Canadian lender filed foreclosure proceedings against Kohn’s 206 Kent Avenue Owner LLC in New York Eastern District Court last spring.

It’s unclear how long Trader Joe’s will stay onboard with its plan to open at 206 Kent Avenue, especially if a new building is still a long ways away. The lease terms require a 43-car garage.

Cornell Realty was recently outbid by Gamma Real Estate in the foreclosure auction of the 3 Sutton Place development site in Midtown.