The Real Deal New York

Two Trees buys Gowanus sites for $100M+

Deal includes Forest City-owned Lowe's site
January 29, 2018 04:40PM

118 2nd Avenue (Credit: Google Maps)

UPDATED, Jan. 29, 5:55 p.m.: Two Trees Management bought two neighboring commercial sites in Gowanus, including a former Pathmark and a Lowe’s Home Improvement store, for over $100 million.

The development firm paid around $65 million for the Pathmark site, which includes a 70,000-square-foot building at 1-37 12th Street and an adjacent 100,000-square-foot parking lot, according to Crain’s. The seller was Hamilton Plaza Associates. The seller, a joint venture between Meral Property Group and Joyland Group, bought the property for $35 million in 2016.

The second site, at 118 Second Avenue, is owned by the U.S. Postal Service and Forest City Ratner held the leasehold after entering a 99-year agreement with the postal service in 2003. The nine-acre property is currently home to a Lowe’s Home Improvement Store, whose 20-year lease will expire in 2023. It’s unclear how much Two Trees paid for the leasehold, but the two deals combined exceed $100 million, the publication reported.

Both sites are in an Industrial Business Zone, which restricts usage to commercial or industrial purposes.

Two Trees is best known for its residential developments in Dumbo and other key Brooklyn markets, so an industrial purchase marks a shift from their usual practice. However, with last-mile delivery centers increasingly in demand, many developers are making plays for industrial space, especially in urban centers like Brooklyn. Two Trees did not comment on the intended use of the site.

This is one of a string of liquidations from Forest City Ratner, which has been selling many of its New York assets. The firm sold the majority of its stake Pacific Park to partner Greenland USA, and a $1 billion retail portfolio to Madison International.  [Crain’s] Chava Gourarie