Real estate investment firm Angelo, Gordon & Co. is seeking to sell a large office building it controls in downtown Brooklyn for about $100 million.
The firm, well known for buying Chelsea Market, Industry City in Sunset Park and similar properties, has hired a sales team from the brokerage firm JLL to market and arrange a deal for 30 Flatbush Ave., a roughly 250,000-square-foot building that is net leased to Con Edison. The city owns the land under the building and, under the ground-lease agreement, has the right to take back control of the property when the lease expires in 54 years. Con Ed has occupied the building since it was built in the early 1970s and is responsible for paying the property’s taxes and maintenance costs.
According to Glenn Tolchin and Anthony Ledesma, brokers at JLL who are handling the sale along with colleague Yoav Oelsner, the deal offers a buyer 5% return and future upside when Con Ed’s rent resets in roughly 10 years. Tochin and Ledesma said the reset will allow the owner of the ground lease to raise rents to 95% of market value.
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With thousands of residential units being built in downtown Brooklyn as well as new office space, the market for commercial rents is forecast to rise, making that future rent reset an attractive option for potential buyers.
“The investment opportunity presents a great yield with limited risk,” Ledesma said. “There’s also upside because of the inherent rent growth in a market that will continue to mature over the term of the net lease.”
The deal is the first major sale being marketed by the JLL team, which recently became leaders of the brokerage firm’s sales group. Tolchin, Ledesma and Oelsner previously worked with senior brokers Richard Baxter, Scott Latham and Ron Cohen, who recently departed to join rival firm Colliers International, as well as Jon Caplan, who also left JLL.
JLL retained Tolchin, Ledesma and Oelsner and promoted them to lead its sales practice in the city.
Tom Beneville, a JLL executive who works in the corporate finance and net lease practice, is working with the team on the 30 Flatbush Ave. deal.
Real estate investment firm Angelo, Gordon & Co. is seeking to sell a large office building it controls in downtown Brooklyn for about $100 million.
The firm, well known for buying Chelsea Market, Industry City in Sunset Park and similar properties, has hired a sales team from the brokerage firm JLL to market and arrange a deal for 30 Flatbush Ave., a roughly 250,000-square-foot building that is net leased to Con Edison. The city owns the land under the building and, under the ground-lease agreement, has the right to take back control of the property when the lease expires in 54 years. Con Ed has occupied the building since it was built in the early 1970s and is responsible for paying the property’s taxes and maintenance costs.
According to Glenn Tolchin and Anthony Ledesma, brokers at JLL who are handling the sale along with colleague Yoav Oelsner, the deal offers a buyer 5% return and future upside when Con Ed’s rent resets in roughly 10 years. Tochin and Ledesma said the reset will allow the owner of the ground lease to raise rents to 95% of market value.
With thousands of residential units being built in downtown Brooklyn as well as new office space, the market for commercial rents is forecast to rise, making that future rent reset an attractive option for potential buyers.
“The investment opportunity presents a great yield with limited risk,” Ledesma said. “There’s also upside because of the inherent rent growth in a market that will continue to mature over the term of the net lease.”
The deal is the first major sale being marketed by the JLL team, which recently became leaders of the brokerage firm’s sales group. Tolchin, Ledesma and Oelsner previously worked with senior brokers Richard Baxter, Scott Latham and Ron Cohen, who recently departed to join rival firm Colliers International, as well as Jon Caplan, who also left JLL.
JLL retained Tolchin, Ledesma and Oelsner and promoted them to lead its sales practice in the city.
Tom Beneville, a JLL executive who works in the corporate finance and net lease practice, is working with the team on the 30 Flatbush Ave. deal.
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