The Real Deal New York

Dov Hertz buying 4-acre Red Hook site next
to IKEA

He and Goldman Sachs Asset Management are planning a 350K sf distribution center
By Mark Maurer | Twitter_logo_blue copy November 21, 2017 06:00PM

Dov Hertz and 640 Columbia Street (Credit: Google Maps)

Dov Hertz’s DH Property Holdings, in partnership with Goldman Sachs Asset Management, is in contract to acquire a four-acre development site next to the IKEA store in Red Hook, The Real Deal has learned.

The buyers are planning to construct a 350,000-square-foot, multi-story e-commerce distribution center on the site at 640 Columbia Street, according to sources familiar with the deal.

The owner, the 601W Companies, which is led by Harry Skydell and Mark Karasick, was looking to sell the site for $50 million, or $142 per buildable square foot. While the price the firms are paying was not immediately clear, sources said it was close to $50 million.

In full, the site offers 352,000 buildable square feet, records show. The new buyers are targeting either one or multiple e-commerce tenants for the warehouse, a source said.

The 601W Companies acquired the site from Ruby Schron for $21 million in 2012, according to property records. The site’s alternative addresses are 46-56 Halleck Street and 588 Columbia Street.

The few tenants who still occupy the structures on the site — including a concrete manufacturer among others — have leases expiring in the near future, sources said.

A Hodges Ward Elliott team led by Will Silverman is brokering the transaction. Goldman and Hertz declined to comment, while Hodges Ward Elliott and 601W Companies did not immediately respond for comment.

Hertz, a former Extell Development acquisitions executive, launched his firm earlier this year. His first deal was an eight-building package he bought with the Fruchthandler family for $141.5 million.

Goldman Sachs Asset Management, one of the world’s largest asset managers, has been aggressively buying up bonds tied to subprime mortgages and home loans dating back to before the late-2000s downturn.

The 346,000-square-foot warehouse that IKEA occupies at 1 Beard Street on the Red Hook waterfront has been open since 2008.

Elsewhere in the neighborhood, UPS recently signed a triple-net-lease for a 12-acre property that was previously slated for a 400,000-square-foot office complex. A new UPS distribution center is expected to rise on that site.

Thor Equities is also developing a 7.7-acre office complex called Red Hoek Point next to IKEA at 280 Richards Street.