The Real Deal New York

UPS signs megadeals in BK and Queens

Triple-net lease deals inked for former Est4te Four site and old Duane Reade hub
By Mark Maurer | Twitter_logo_blue copy October 30, 2017 06:22PM

Rendering of scrapped Est4teFour project on Red Hook site now owned by Sitex (Credit: NBBJ)

When it comes to leasing volume for industrial space in New York City’s outer boroughs, UPS is delivering.

The package-delivery giant recently signed a long-term triple-net lease for two massive sites in Brooklyn and Queens spanning a total of 1.7 million square feet, The Real Deal has learned.

New distribution centers will likely rise on both sprawling sites. One is the 12-acre Red Hook site that Italian developer Est4te Four wanted to redevelop into a mixed-use office complex, but ultimately sold to industrial landlord Sitex for $110 million in May. The site holds six buildings spanning 350,000 square feet and offers a total of 1.2 million buildable square feet. The deal is for the entire site – at 219 Sullivan Street, 202 and 242 Coffey Street, and 68 and 100 Ferris Street –including the three acres now used as parking.

The other site is a 475,000-square-foot warehouse at 50-02 55th Avenue in Maspeth, which was long used as a Duane Reade distribution center until it shuttered in May. Duane Reade relocated its operation to Linden, New Jersey.

Solil Management, the company that controls the assets of the late real estate mogul Sol Goldman, has owned the Maspeth site for more than 30 years, property records show.

Asking rents were $20 per square foot in Maspeth and $25 per square foot in Red Hook, sources said.

The length of the triple-net leases was not immediately clear. In a triple-net lease, the tenant is responsible for all costs such as taxes and utilities.

Representatives for UPS, Solil, and Sitex, based in Englewood, New Jersey, declined to comment.

Avison Young represented UPS in the deals, sources said.

The city’s industrial market has taken a significant hit, having lost more than 11 million square feet of space to rezonings between 2007 and 2016, according to an Ariel Property Advisors report.

In August, Home Depot bought a 7.3-acre site in Maspeth that houses a Coca-Cola bottling plant for $63 million.