The Real Deal New York

Dov Hertz in contract to buy massive dev site in Sunset Park. Here’s what he’s planning.

18-acre plot comes with 1.6M buildable sf, was asking $300M: sources
By Adam Pincus | July 25, 2018 02:24PM

Dov Hertz and Sunset Industrial Park at 75-81 20th Street in Brooklyn (Credit: Google Maps)

Dov Hertz is placing another huge bet on the value of the Brooklyn waterfront and rise of e-commerce.

In partnership with Bridge Development Partners, the developer signed a contract this month to buy the 18-acre Sunset Industrial Park that had an asking price of roughly $300 million, sources told The Real Deal.

The parcel, with multiple addresses including 75-81 20th Street, has approximately 1.6 million square feet of buildable zoning rights, sources said.

A spokesperson for owner 601W Companies confirmed there was a deal to sell the site to Hertz’s company DH Property, but would not comment further. DH Property declined to comment.

Moshe Majeski of the Majeski Group represented the buyer and the seller in the deal. A JLL team of Mo Beler and Aaron Appel represented DH Property in its joint venture with Bridge Development, and is working to secure debt for the acquisition. Crain’s first reported that the deal was in contract.

DH Property and Chicago-based Bridge Development would redevelop the site with new warehouse space which would be used as a distribution hub and leased to end-users, according to sources.

This purchase contract mirrors another one DH Property signed last fall at 640 Columbia Street in Red Hook. In November, TRD reported that Hertz’s firm in partnership with Goldman Sachs Asset Management was in contract to buy the parcel and develop a 347,000-square foot, three-story warehouse.

That transaction closed in February for $47.5 million, according to property records.

Insiders said demand is high for industrial space that can be used speed delivery to homes and businesses in New York City.

“No doubt with e-commerce, the location would make a tremendous hub for last-mile deliveries,” said Timothy King, a broker with CPEX Real Estate who, was not involved in this deal, but his firm was involved in another DH Property deal, at 537-555 Columbia Street. Brokers said there was demand from Internet firms like Amazon to have warehouse space near their customers, or from distribution and logistics companies like FedEx or UPS.

The site, along the Brooklyn waterfront, has multiple buildings with approximately 400,000 square feet in existing space. FedEx and Verizon are among the largest tenants. Those tenants and others have leases that are “staggered” according to sources.

601W Companies assembled the site in pieces for a total of about $116 million, starting in 2013 and adding to that in 2015.

Correction: A previous version of this story had the incorrect address for the Columbia Street deal CPEX was involved in. The correct address is 537-555 Columbia Street.