Real Estate Equities buys $150M leasehold for St. Mark’s Place assemblage
Developer plans new office building on corner, best known for Continental bar
Real Estate Equities Corporation picked up the 99-year leasehold for an East Village assemblage on the western edge of St. Mark’s Place for north of $150 million, with plans for a ground-up boutique office building, sources told The Real Deal.
The developer, led by Brandon Miller and Mark Siegel, is planning to demolish the existing low-rise buildings at 3 St. Mark’s Place, 23 and 25-27 Third Avenue to make way for one new property. Plans call for a seven-story, 66,000-square-foot office building, including 6,000 square feet of corner retail.
Real Estate Equities Corporation (REEC) closed on the deal Wednesday. The firm partnered with an unidentified Canadian family office to close the deal, sources said. The family office provided acquisition and development equity funds.
Sources familiar with the deal said the aggregate value of the leasehold is north of $150 million, or $1.5 million per year.
The project also means that several St. Mark’s Place staples will soon be saying goodbye. The buildings are home to retailers such as Continental – the popular East Village watering hole that offers five shots for $10 – Korean barbecue spot Korilla, tattoo shop Village Dream, gift shop Unique Collection, and Papaya King.
The one-story buildings at 3 St. Mark’s Place and 25-27 Third Avenue are strictly retail, while the three-story property at 23 Third also holds apartments upstairs.
The sellers are Edward and Joseph Gabay, the family behind the now-shuttered East Village discount clothing store Gabay’s Outlet. They have owned the buildings since at least the early 1990s, records show.
JLL’s Yoav Oelsner, Glenn Tolchin, Anthony Ledesma and Michael Pallas represented the seller. Carlton Group’s Howard Michaels, Steven Fenster and Michael Campbell brokered the joint-venture equity and debt deals. A Manhattan-based alternative investment firm provided the loan.