Three investors are bringing a Texas-sized warehouse to Brooklyn.
Banner Oak Capital Partners, the investment advisor for the Texas teachers’ pension fund, has joined Dov Hertz and Bridge Development Partners on their plan to redevelop an 18-acre industrial park in Sunset Park. The trio closed Thursday on the $255 million purchase of the Sunset Industrial Park along the Gowanus Canal, the partners told The Real Deal.
Apollo Commercial Real Estate Finance provided a $200 million acquisition loan for the property, which has an address of 75-81 20th Street.
The new owners plan to demolish existing buildings on the campus and build a four-story distribution center of up to 1.3 million-square-feet, which they’re billing as the largest of its kind in the United States.
“This will be a groundbreaking project for the U.S. industrial market, not only because of the building’s unprecedented design — essentially, four separate, stacked distribution centers — but also because of the enormous benefit it will have from a ‘last mile’ standpoint,” Jeff Milanaik of Bridge Development Partners said in prepared remarks.
Demolition on the property is set to begin in early 2020, with construction scheduled to begin later that year.
Hertz – the longtime assemblage expert for Extell Development who left the company to start his own firm, DH Property Holdings, in 2016 – said the location is within a one-hour drive of 13 million consumers.
“It sits at the nexus of the inbound and outbound traffic needs of any third-party logistics, parcel carrier, or retailer looking to meet same, or next day, delivery in New York City,” he said in a statement.
Vertical warehouses are all the rage as developers in dense urban markets like New York City look to meet the demand from last-mile logistics companies.
The partners signed a contract back in July to purchase the site from 601W Companies, as TRD reported at the time.
A JLL team led by Rob Kossar, Aaron Appel, Jonathan Schwartz and Mo Beler advised the new owners on the purchase, and arranged financing for the deal. Moshe Majeski of the Majeski Group represented the buyer and the seller in the deal.
Dallas-based Banner Oak Capital and Bridge Development Partners, headquartered in Chicago, have a history of working together. The two are reportedly planning to build 1.2 million square feet of warehouse space near Chicago. Banner Oak in June closed on two investment funds with a combined $800 million, which were backed by the Teacher Retirement System of Texas.