The Real Deal New York

Two Trees completes Gowanus assemblage with $62M deal

Developer had closed on adjacent site for $53M in April
By Eddie Small | May 24, 2018 11:00AM

1-37 12th Street and Jed Walentas (Credit: Google)

Two Trees Management has closed on part two of its $115 million Gowanus assemblage.

The company purchased 1-37 12th Street for $62 million, according to TerraCRG,  which brokered the sale. The site includes a former Pathmark store, and it is right next to the roughly 400,000-square-foot Lowe’s site at 118 Second Avenue that Two Trees closed on in April for $53 million.  The assemblage spans almost 15 acres and about 1.25 million buildable square feet overall.

A TerraCRG team led by Dan Marks, Ofer Cohen and Daniel Lebor brokered both deals. Forest City Ratner sold the Lowe’s site, and Team Slope LLC — a joint venture between Meral Property Group and Joyland Group — sold the Pathmark site.

The city is likely to rezone Gowanus in the near future, and developer Domain Companies recently bought two sites in the neighborhood — 420 Carroll Street for $47.5 million and 545 Sackett Street for $26.5 million — with an eye on building a larger project.

However, Marks said Two Trees does not seem to be following this strategy and noted that Lowe’s has a long-term lease on the Second Avenue site. He described the assemblage as a very long-term investment and said that the company’s short-term plans likely just involve leasing to commercial tenants.

“While the north side of Gowanus is under discussion for rezoning, this portion is slated to remain a commercial and industrial enclave for some time,” he said in a statement.

Two Trees managing director David Lombino echoed this, saying that the company does not plan to pursue a rezoning in the near future but still believes that there are “far more productive and innovative long-term uses for the Pathmark and Loew’s sites than acres of underutilized parking and low-paying retail jobs.”

At TerraCRG’s May 16 Only Brooklyn conference, Two Trees CEO Jed Walentas said on a panel that Gowanus remained a difficult neighborhood to build new office or industrial properties.

“It’s still kind of nowhere,” he said. “I think my son and daughter will be super appreciative someday, and someday it’ll probably change.”

The Real Deal recently ranked Two Trees as Brooklyn’s most active developer by square footage with roughly 1.74 million square feet of projects in the borough.