Normandy taking $100M majority stake in Dumbo Heights building
Invesco to be bought out of vacant property 175 Pearl at 1.2M BK complex
UPDATED, 7:05 p.m., March 30: Normandy Real Estate Partners is set to close Friday on the $100 million purchase of a majority stake in 175 Pearl Street at Dumbo Heights, The Real Deal has learned. The 204,000-square-foot property, which has remained vacant for over a year, is part of the complex being developed by Kushner Companies, RFR Realty and LIVWRK.
Normandy, a New Jersey-based real estate investment firm, will take the lead on redevelopment and leasing efforts at the eight-story property. Kushner Companies, LIVWRK and RFR will move into a “single-digit” minority position, sources said. Invesco, which was an equity partner in the building, is being bought out, sources added.
It was not immediately clear if brokers were involved. Representatives for Kushner, RFR and Blackstone declined to comment, while Normandy and LIVWRK did not respond to requests for comment.
Normandy secured a $91 million acquisition and redevelopment loan from Blackstone Group for the deal, sources said. Of that amount, Normandy is receiving nearly $60 million in financing up front and the remaining funds if they invest $50 million in renovations.
In Manhattan, Normandy has been actively repositioning office properties, including 125 West 25th Street and 797-799 Broadway in Greenwich Village.
The Dumbo Heights developers tapped CBRE to lease the building over a year ago, but no leases have yet been signed.
Setting aside 175 Pearl, the complex has had success finding tenants such as WeWork, Etsy and Alexis Bittar. Earlier this month, the Guardian’s U.S. office scrapped plans to relocate to an unidentified building at Dumbo Heights, with BuzzFeed reporting that journalists were worried that the ownership’s ties to Jared Kushner may spook sources from communicating with them in the new office.
Laurent Morali became head of Kushner Companies in January after Jared, who had been the CEO of the development firm for over a decade, stepped down to take on a senior adviser role at the White House. Kushner Companies is now seeking a partner to redevelop its office skyscraper at 666 Fifth Avenue after Anbang Insurance Group backed out of talks. The firm is also in contract to sell four Astoria rental buildings for $76 million.
In 2013, Kushner, RFR, LIVWRK and Invesco paid $375 million for the Jehovah’s Witnesses buildings now known as Dumbo Heights. The complex holds about 1.2 million square feet of space.