NEWS

Aug 29 2016
The Real Deal

DAVEY'S ICE CREAM SCOOPS UP GREENPOINT SPACE

Artisan creamery inks 15-year lease at Ironstone’s 74 Meserole Ave.


From left: Davey’s Ice Cream at 137 First Avenue in the East Village, and the building
at 74 Meserole Avenue in Greenpoint (inset: Davey’s ice cream cones)


Leaving a trail of sprinkles across the city, popular East Village artisan creamery Davey’s Ice Cream signed a 15-year lease for its third location, in Greenpoint, sources told The Real Deal.

The shop would occupy a total of 3,200 square feet at Ironstone Partners’ 74 Meserole Avenue, also known as 162-168 Guernsey Street. The space would be evenly split between the ground floor and the lower level of the three-story mixed-use building, said Constellation Real Estate Advisors’ TRData LogoTINY Ryan Reszelbach, who represented the landlord.

Asking rent for the space is in the low-to-mid-$60s per square foot.

The new outpost is the chain’s largest yet. The space is also slated to be used for ice cream making courses and tasting events.

David Yoo opened the first Davey’s Ice Cream in the East Village in 2013, at 137 First Avenue, near East 9th Street. Last year, Yoo opened the second location, at 201 Bedford Avenue in Williamsburg. Davey’s boasts that it makes its desserts from scratch and pasteurizes its own ice cream mix in-house.

Ironstone Partners, a Midtown-based development and investment firm led by Morwin Schmookler, has owned the Meserole Avenue building since 2014, when it paid $1.8 million, property records show.

“Davey’s focus on quality, local sources for ingredients is sure to allow for many new and exciting opportunities for them” at the building, Schmookler said in a statement.

The property is located just two blocks from the neighborhood’s main thoroughfare, Manhattan Avenue. Mona Lisa Coffee Shop formerly leased the space.

Eastern Consolidated’s Alex Geisinger represented the tenant. Representatives for Davey’s Ice Cream could not be reached for comment.

Elsewhere in Greenpoint, a new supermarket called Gourmet Affair signed a 20-year, 11,000-square-foot lease at 1133 Manhattan Avenue in March.

Aug 28 2016
City Biz List

203 CHRYSTIE STREET FOR LEASE: JOIN IAN SCHRAGER AND WHOLE FOODS

-- Retail Space offers up to ±1,300 of ground floor area located at 203 Chrystie Street, Lower East Side --

Constellation Real Estate Advisors LLC (CREA) has been selected to exclusively market for lease a +/-1,300 sq. ft. ground floor retail opportunity in the Lower East Side, steps from Whole Foods and the new Ian Schrager project at 215 Chrystie Street.

Exclusive agents Ryan Reszelbach, Director of Retail Leasing, along with Founders and Partners of Constellation Real Estate Advisors, Nicole Rabinowitsch and Gabriel Saffioti, are marketing this ground-floor retail leasing opportunity.

“This is an exciting time for this section of the Lower East Side. It’s developing into a rival to neighboring NoLiTa and retailers are taking notice.” Said Ryan Reszelbach, Director of Retail Leasing at Constellation Real Estate Advisors. Located off the F Train Stop at 2nd Avenue and the J Z Train Stop at Bowery, as well as the M at Essex, the prominent 25 feet of street frontage just off the corner has previously been utilized as an office for a catering company.

The building at 203 Chrystie Street is just a short walk from a vast variety of restaurants, galleries, bars, tourist attractions as well as local and national retailers; it is located between Stanton and Rivington Streets.

About Constellation Real Estate Advisors LLC

Constellation Real Estate Advisors LLC [CREA] is a Williamsburg, Brooklyn based brokerage that specializes in the sale of commercial, development and multi-family investment properties, as well as retail leasing and advisory services throughout the Tri-State region. The CREA team has transacted over $540 million in commercial real estate assets over the past three and a half years. Utilizing diverse knowledge, inter-office cooperation, proven experience and credulous relationships, CREA provides a symbiotic, conflict-free approach to commercial brokerage.

www.constellationrea.com/203Chrystie.pdf

Aug 22 2016
The Real Deal

LEARNING AND EARNING: HASIDIC BROOKLYN’S REAL ESTATE MATCHERS

Investors from ultra-Orthodox sect have spent $2.5B+ in 5 areas over past decade: TRD analysis

Hasidic investors and developers have transformed Brooklyn, but they remain in the shadows (Illustration by Lexi Pilgrim for The Real Deal)


TRD Special Report: On the day before Thanksgiving, Yoel Goldman phoned one of his go-to lenders with an urgent request.

The Brooklyn developer, who heads All Year Management, wanted to score a construction loan for his Albee Square project by Monday, which gave him just one business day to make it happen.

The lender, Gary Katz of Downtown Capital Partners, reminded him of Thanksgiving. But Goldman, who is from the Satmar sect of the Hasidic branch of ultra-Orthodox Judaism, countered: “So you can’t work Thanksgiving tomorrow, but you still have all of today, Friday and Sunday.’”

Katz tried an analogy. Wednesday, he told Goldman, is Erev Yontiff – “evening before the holy day” in Yiddish – and Friday is Chol HaMoed – a weekday between two holy days. For most Hasidic Jews, Chol HaMoed is an occasion for family and Talmud study, not dealmaking.

Goldman got that, and held off. Property records show he ultimately received a $25 million mortgage from Downtown Capital and RWN Real Estate Partners – on Christmas Eve.

The real estate investors who hail from Brooklyn’s insular Hasidic communities are some of the industry’s most active and powerful players. Over the past decade, they’ve spent more than $2.5 billion on acquisitions in five prime Brooklyn neighborhoods, according to an analysis of property records by The Real Deal. But unlike their Grill Room-dining, art-collecting Manhattan counterparts, they prefer to stay in the shadows, their connections to properties masked through a network of frontmen and a labyrinth of LLCs. Most have no websites, and some have never been photographed.

This immense cultural divide hasn’t stopped them from transforming key neighborhoods into yuppie central, where rents and sales prices have skyrocketed. From the second quarter of 2008 to the second quarter of 2016, the average apartment sales price in Williamsburg doubled – from $668,956 to $1.3 million, according to real estate appraisal firm Miller Samuel. The average sales price in Bedford-Stuyvesant jumped 67.8 percent, to $877,225, and average monthly rents in Bushwick jumped 70.6 percent, to $2,643. Borough-wide over the same period, the average sales price climbed by 38.8 percent, to $816,827, and average monthly rents rose 26.2 percent, to $3,137, the data show.

“The Hasidic community helped create the frenzy [in Brooklyn] we have today,” said Pinnacle Realty’s David Junik. “They let the market explode after that.”

A clandestine empire

Any Brooklynite could tell you the Hasidim are prominent landlords in the borough. But the extent of their dominion long remained unclear.

These 10 addresses in Hasidic Williamsburg are linked to over $2.5 billion in real estate purchases (source: The Real Deal analysis of city property records)

TRD reviewed every building purchase in five of the borough’s fastest-growing neighborhoods – Williamsburg, Greenpoint, Bushwick, Bedford-Stuyvesant and Borough Park – between January 2006 and mid-June 2016. Over this period, 10 addresses – affiliated with one or more firms – were each responsible for at least $100 million in purchases. The analysis included only addresses where the total expenditure involved five or more separate purchases, indicating repeat bets on neighborhoods. Firms like Forest City Ratner, Two Trees Management and Spitzer Enterprises, for example, also spent big on these neighborhoods, but made fewer deals.

The 10 addresses (see chart above) were predominantly clustered in South Williamsburg and Borough Park. In Williamsburg, they include 390 Berry Street, 320 Roebling Street, 266 Broadway, 183 Wilson Street, 543 Bedford Avenue, 199 Lee Avenue and 505 Flushing Avenue. Mapping them out north to south takes you on a walking tour through the heart of the neighborhood’s Hasidic enclave.

The addresses point to a who’s who of Brooklyn real estate: Simon Dushinsky and Isaac Rabinowitz’s Rabsky Group; Joseph Brunner and Abe Mandel’s Bruman Realty; Yoel Goldman’s All Year Management; Joel Gluck’s Spencer Equity; Joel Schwartz; the Hager family; and Joel Schreiber’s Waterbridge Capital.

One address, 199 Lee Avenue, is affiliated with an incredible 1,400 LLCs. Over the 10-year period, the mailbox hub on Hasidic Wiliamsburg’s main commercial corridor is linked to 423 purchases totaling $583.5 million, the data show.

Some of the biggest deals were Goldman’s April 2016 purchase of part of the Rheingold Brewery site in Bushwick for $72.2 million, and Goldman and Toby Moskovits’ 2012 purchase of the Williamsburg Generator site at 25 Kent Avenue for $31.8 million. (Goldman is no longer an investor in the 480,000-square-foot Generator office project.)

Dushinsky, Goldman, Brunner and Mandel are considered the heavyweights. Goldman, who is in his mid-30s, owns a portfolio of more than 140 rental buildings. The bulk of his holdings were included in his bond offering on the Tel Aviv Stock Exchange, and were valued at $850 million, according to a recent filing. He’s also looking to build up to 900 rental apartments at a 1 million-square-foot complex at the former Rheingold Brewery site. Brunner and Mandel, also in their 30s, own more than 100 buildings. Dushinsky, who is in his 40s, has more than 600,000 square feet under development, including a 500-unit project at the Rheingold site. He’s also pushing for a rezoning at the former Pfizer site at the edge of Bed-Stuy that would allow him to develop a 777-unit rental complex.

A rendering of All Year Management’s Rheingold Brewery project (credit: ODA New York)

Most of these investors, believers in the concept of “ayin ha-ra” or evil eye, either didn’t respond to requests for comment for this story or declined to comment. Dozens of market sources who spoke to TRD for this story did so under condition of anonymity, for fear of antagonizing them.

“They believe their success happens because they’re under the radar,” a former employee at a top financial brokerage said. “Blessings come from God for staying private.”

The pious ones

During and after World War II, thousands of Hasidim migrated from places such as Hungary, Romania, Poland and South Ukraine to Williamsburg and Borough Park. Joel Teitelbaum, the founder of the Satmar Hasidic movement, urged the young men to balance their prayers with jobs that would provide for the community. Some went into the diamond trade, kosher foods, garments and light manufacturing. Real estate was particularly appealing because for a long time, Jews in Europe were barred from owning land.

“There was a deeply psychological aspect to owning real estate that drove the first wave,” a source said. “There wasn’t a notion that they could get rich off this.”

Today, their approach to the business is completely different. Hasidic investors — including those from the Vizhnitz, Satmar, Klausenberg and Ger dynasties — are among the fastest-moving dealmakers in the industry, and have jumped headfirst into property speculation and large-scale development.

For decades, the Satmars had been lobbying for the Williamsburg-Greenpoint rezoning, which came to pass in 2005 and transformed a roughly 175-block area along the East River from industrial to residential and mixed-use. The rezoning led to a luxury condominium and rental boom in the borough, but when the market turned in 2008, development and lending slowed. A select few Hasidic firms then bought nonperforming mortgages.

“A lot of capital withdrew from real estate,” said Gabriel Boyar of Columbia River Capital Advisors, a real estate investment and advisory firm. “Those who remained doubled down and acquired assets at a cheap price.”

By the early 2010s, as the industry recovered, the firms brought those buildings or parcels to market, reaping large gains.

These days, the Hasidim are some of the keenest practitioners of the buy-and-flip, often employing the 1031 deferred-tax exchange to plough profits from one deal into the next. They also use their construction savvy to get projects moving before selling them at a premium.

Rabsky, for example, bought a former silverware factory at 51 Jay Street in Dumbo for $25 million in 2012. Within a year, the firm secured approval for a one-story addition as part of a proposed residential conversion, and then sold the building to Silverstone Property Group for $45.5 million. Silverstone’s Martin Nussbaum and David Schwartz, who later formed Slate Property Group, partnered with Adam America Real Estate to develop it into 73 condo units and a townhouse. The late Satmar president Isaac Rosenberg and his brother Abraham, after securing a zoning variance at 462-484 Kent Avenue, put the site on the market for $210 million, drawing interest from the likes of HFZ Capital Group and Michael Fascitelli.

“Blessings come from God for staying private.”

The business “became more of a trade than a long-term investment,” said a prominent lawyer for Hasidim-led firms. “They used to look at yield over 30 years. There’s more of a shorter vision now – just two to three years.” Despite this more frenetic pace, many things remain as they were. Developers often live and work on the ground floor of buildings they own. They’re uncomfortable dining out, unlike the Gary Barnetts of the world who frequent kosher hotspots such as the Prime Grill. Their schmoozing happens at school functions, weddings and synagogue.

Two of the largest Satmar synagogues, located on Rodney Street and Hooper Street respectively, are both called Congregation Yetev Lev D’Satmar. Inside them, investors chit-chat at the ritual bath known as a mikvah. “You see people,” one source said, “and you just bullshit.”

Given that the poverty rate in the Hasidic community — 43 percent, according to a 2011 UJA-Federation of New York study — is the highest among Orthodox Jews, the developers’ patronage of yeshivas and synagogues gives them a lofty status.

“Real estate is not a big employer,” said Philip Fishman, author of “A Sukkah Is Burning: Remembering Williamsburg’s Hasidic Transformation.” “It’s only a few percent of the total community, but some [developers] may be worth tens of millions of dollars and are relied upon to support many of the poor people.”

The ultra-Orthodox enclave of Williamsburg — a top beneficiary of Section 8 housing vouchers — is almost exclusively Hasidic, while Borough Park is home to both Hasidic and Haredi Jews. Due to extremely high birth rates, the Hasidic population in Brooklyn has been forced to spread south of Williamsburg into northern Bed-Stuy and expand its footprint in the heavily Orthodox village of Kiryas Joel upstate, Fishman said.

Along with secular housing, developers like Rabsky continue to build religious housing – “by Jews, for Jews,” as a source put it. The projects typically hold cookie-cutter units that are sold at discounts. There is also a loose rule to preserve housing for fellow Hasidim: If one buys a building owned by a non-Jew, he may market it to hipsters. If one buys a building from a paisan, however, he should keep it as is. Luxury buildings in Williamsburg like the Gretsch – a condo conversion at 60 Broadway by Orthodox Jewish developers Martin and Edward Wydra, where a penthouse sold in 2013 for $4.3 million – faced strong opposition from the Hasidic community.

Though there are occasional displays of wealth among the Hasidim — rich men, or “gvirim,” may sport a felt derby hat from Bencraft Hatters, which offers more than 100 styles — they are far removed from the flashes of excess seen among others in the industry.

“If you don’t have a 72-foot Azimut yacht, two Ferraris and three houses, what the hell do you do with your money?” a source said.

Mishpacha

The Hasidim have become masters of the deal syndication model pioneered by late titan Harry Helmsley: To make an acquisition, they bring in anywhere from dozens to thousands of small-time equity investors, both local and international. Though their operations have grown more sophisticated, company heads tend to steer clear of dense Excel spreadsheets to run the numbers on a prospective deal.

“These guys are still very old school,” a lender source said. “They’ve memorized half the Talmud – they prefer to do complex calculations in their head.”

Their approach to financing projects also stands out. While firms such as Two Trees Management and Tishman Speyer shoot for the big institutional loan up-front, many Hasidim wait until just before breaking ground to line up funds. They prefer to finance in smaller loan increments over multiple stages, which allows them to tweak their design plans or bring in new partners, and then subsequently restructure the financing, sources said. Josh Zegen, co-founder of Madison Realty Capital, said this approach is “more of a middle-market entrepreneur thing” in general. “As values increased, some sponsors have refinanced their properties during the course of development, using leverage to return equity to their investors,” Boyar said. Once the property is fully leased and operating, they can secure long-term debt. By contrast, he added, “institutional developers have been able to take advantage of the capital markets and finance their developments early on at lower interest rates.”

“If you don’t have a 72-foot Azimut yacht, two Ferraris and three houses, what the hell do you do with your money?”

Most Hasidic investors rely on hard money lenders, a cadre that includes G4 Capital Partners, Emerald Creek Capital, Downtown Capital Partners and Trevian Capital. They also tap development and investment firms like Madison Realty Capital and Ari Shalam’s RWN Real Estate Partners, the family office of Apollo Global Management co-founder Marc Rowan.

But some of the bigger players have been able to lock in major banks and other institutional lenders. In the past year, Rabsky secured $95 million from TD Bank to refinance its debt at Leonard Pointe and an $80 million acquisition loan from Bank Leumi for a development site it bought from Forest City Ratner. For the Rheingold Brewery redevelopment, Madison Realty Capital and Bank Leumi provided acquisition financing — $70 million to All Year and $50 million to Rabsky, respectively.

Other banks that work with the bigger Hasidic firms include Dime Savings Bank, Santander Bank, Centennial Bank, Bank United and Modern Bank, sources said.

Some Hasidim have taken their quest for funds to the the Tel Aviv Stock Exchange. Goldman, for example, raised $166 million to date, from a total of two bond issuances. Pooling properties together makes them easier to refinance, a source said. But others in the community, reluctant for the spotlight that comes from being in the public markets, avoid this path.

Amid the deal frenzy, the Hasidim are also dabbling in trading debt.

“These guys are very liquid,” said a prominent financing broker. “You’ll see them very strategically buying notes on properties, but only within their own strike zone. They are very, very good in the markets that they know.”

The outside world

The Hasidim are encouraged to remain insular — except when it comes to business.

Some developers from the community have become especially skilled at making a high-end product for young and upwardly mobile professionals, Jewish or otherwise.

“They’ve memorized half the Talmud – they prefer to do complex calculations in their head.”

“They’re informed about new trends to the extent that it might be shocking,” said Eran Chen, founder of ODA New York, which is designing the Rheingold Brewery sites for Goldman and Rabsky. “If you sell something and do it well, it’s still not something that you would necessarily buy [for yourself].”

The Rabsky principals, for example, proposed a series of treehouses in landscaped Zen gardens located throughout the under-construction building at 10 Montieth Street. That property will boast a 25,000-square-foot zigzagging landscaped roof for biking, running and gardening.

A rendering of 10 Montieth Street (credit: ODA New York)

“We have conversations about amenity spaces I’ve never had before – typologies that don’t exist,” Chen said. “People have a preconceived view: that they don’t experience the city as we do. But they walk around the projects we do, they read, and they have the ability to quickly gain knowledge.”

The Hasidim are more than willing to do deals with outsiders, brokers said, but it’s not always easy to get their ear.

“If you call an owner in Brooklyn and speak Yiddish, you’re going to get a lot further,” said Gabriel Saffioti, who along with colleague Nicole Rabinowitsch left Eastern Consolidated earlier this year to launch Williamsburg-based brokerage Constellation Real Estate Advisors. Rabinowitsch said she hands out business cards at kosher Williamsburg eatery Gottlieb’s to draw potential clients.

Mishpacha

Despite their best efforts, Hasidic investors have recently drawn increased attention — and controversy.

Late last year, New York Gov. Andrew Cuomo, Attorney General Eric Schneiderman and New York City Mayor Bill de Blasio released a list of landlords with properties that benefit from 421a tax abatements but allegedly don’t offer rent-regulated leases to tenants. Rabsky, which was also accused of abusing preferential rent rules at a Williamsburg rental building in a ProPublica investigation, was one of the landlords. The firm denies the claims.

In March, Allure Group, a for-profit nursing-home operator led by Solomon Rubin of the Borough Park-based Bobov Hasidic sect, made headlines for its role in the controversial $116 million sale of Rivington House to developers Slate Property Group, Adam America and China Vanke. The deal is in the center of multiple investigations, including one by U.S. Attorney Preet Bharara. In June, Schneiderman prevented Allure from closing on two other nursing home purchases, citing the Rivington House deal.

“We have conversations about amenity spaces I’ve never had before – typologies that don’t exist.” — ODA New York’s Eran Chen

Perhaps the most notorious within industry circles is Chaim Miller, who got his start working for developer Abraham Leser. A recent investigation by TRD found that Miller, whose assets include the Beekman Tower in Midtown East, has been sued at least 18 times since 2014 by at least 29 individuals and entities.

In recent months, the real estate market slowdown has made Hasidic firms, like others, far more selective about deals. But looking at their overall impact over the decade, it’s clear they’ve been the dominant force in shaping Brooklyn real estate.

“For the sake of their business and their community, they need to create an experience they never had,” Chen said. “Through this, there is the opportunity for innovation.”

Yoryi DeLaRosa and Hiten Samtani contributed reporting.

Aug 16 2016
The New York Times

RECENT COMMERCIAL REAL ESTATE TRANSACTIONS - THE NEW YORK TIMES

FOR LEASE

$110.76/SQ. FT. $144,000 approximate annual rent

203 Chrystie Street (between Stanton and Rivington Streets)

Manhattan


A seven- to 15-year lease is available for this vacant 1,300-square-foot
space three steps below grade with two entrances in a five-story
Lower East Side walk-up. The space, which is dividable, has exposed brick walls and a security system with motion detectors. Neuman’s Kitchen, a catering business, was the previous tenant.


Owner: 203 Chrystie Street Realty Corporation

Broker: Ryan Reszelbach, Constellation Real Estate Advisors

Aug 1 2016
The Real Deal

BUSHWICK, THE SEQUEL

The long-sought redevelopment of the Rheingold Brewery site is shaping up to be a game changer.


The Rheingold Brewery plant in 1976 and the excavated Rheingold site at 10 Montieth St.


In mid-June, renderings for a Brooklyn developer’s sprawling 1 million-square-foot rental complex at the former Rheingold Brewery site were unveiled to the public. Set to be developed by Yoel Goldman of All Year Management and designed by Gramercy-based architect firm ODA New York, the plan is modeled on a European village, showing as many as 900 apartments around interconnecting courtyards. In a wink at the site’s past, the amenities will include an urban rooftop farm with a “hop yard” for growing cultivars to be supplied to local craft brewers.

While such splashy details drew attention, a few in the media also seized on the project’s suggestive name. “The development will be named ‘Bushwick II,’ presumably because the first version of Bushwick was so popular they couldn’t resist making a sequel, this time with twice the gentrification,” Gothamist cheekily noted. Over the past decade, the neighborhood has gone from an area dotted with bodegas, tenements and vacant factories to a cultural phenomenon that’s routinely name-checked by celebrities.

A source close to the developer recently insisted that Bushwick II was an internal, unofficial name.

But the damage was already done. The sentiment of a Bushwick reboot has stuck, and perhaps fairly so. Goldman’s project is the larger of two developments on the 6.4-acre site. Last year, Simon Dushinsky of Rabsky Group released his own proposal for a project, also designed by ODA: a nearly 400,000-square-foot, 500-unit rental building on Montieth Street. Neither has a stake in the other’s project, but together they are developing the largest new residential development the neighborhood has ever seen.

At a projected total cost of at least $400 million, the two Rheingold projects will bring at least 1,300 apartments, significantly upping the development ante in the still mostly low-income area. Citi Habitats’ David Maundrell likened the Rheingold redevelopment to those that transformed North Williamsburg from an artsy enclave into a Soho-esque destination. “This will put more of a stamp on the area — its own campus, its own world,” he said.

Unlikely developers

For Dushinsky and Goldman, both of whom are members of the insular Hasidic community in South Williamsburg, Rheingold represents their most ambitious, sophisticated endeavor to date and advances the two in the ranks of the growing number of Hasidic developers who shun the spotlight but are increasingly tackling high-profile projects geared toward millennials.

“They have chosen a personal life that is somewhat culturally removed,” said ODA’s founder Eran Chen, who described both men as “progressive” and hands-on. “They want to cater to a culture that’s not their own.” Both developers declined to comment for this story.

Dushinsky, who develops a mix of rentals for the masses and condos geared for the Orthodox community, has focused on North Williamsburg in recent years. His projects there include two rental buildings, the 113-unit Driggs on North 9th Street and the 188-unit Leonard Pointe on Leonard Street.

Goldman, meanwhile, specializes in multifamily trades. During the 2000s, he acquired and rehabbed roughly 40 small walk-ups in Bushwick.

David-Maundrell-quoteHis company, All Year, has roughly 2 million square feet in the pipeline, while Rabsky has more than 600,000 square feet actively under development, according to TRData.

Both work without partners, and they have financed their projects largely with their own money, according to sources. In the words of TerraCRG’s Ofer Cohen, “They have built empires without fueling projects with institutional equity.”

Ownership change

The Rheingold project did not come about overnight. Two longtime real estate investors, Robert Wolf’s Read Property Group and Joseph Tabak’s Princeton Holdings, spent years amassing all the parcels for an undisclosed price. In December 2013, the investors secured approval for a rezoning that would allow for a 10-building, 977-unit rental complex with a 30 percent affordable component.

Read and Princeton always kept the option open to sell, no matter how far they advanced the plans. Their project was fully designed by, among others, S9 Architecture, a firm formerly affiliated with Perkins Eastman, which designed the Brooklyn Navy Yard’s Dock 72. The developers were “working through the finishes,” sources said, just before switching gears and opting to sell.

Sources said the firm didn’t sell out of distress. As the market was heating up, Tabak was said to have actively pushed for the partnership to sell, and both parties ultimately agreed it was best. “They did really well, having added tremendous amount of value through the [city zoning] process,” Cohen said, referring to Read and Princeton. From 2014 to 2016, the partners sold the various parcels to Dushinsky and Goldman in a series of off-market deals that totaled $193.7 million: Dushinsky’s Rabsky acquired 10 Montieth Street for $53 million, and Goldman’s All Year snapped up 123 Melrose Street and 28 Stanwix Street for $68.5 million and $72.2 million, respectively, records show. Together, Rabsky and All Year own only part of the entire site. Property records show Read continues to own a few parcels, including a 304,000-square-foot warehouse at 930 Flushing Avenue.

Sizing up the market

The decision by Rheingold’s original investors to sell inevitably raises the question of whether land prices in Brooklyn have peaked. January’s expiration of the 421a program for rental development put a damper on development-site deals, which fell 44 percent year-over year, according to a TerraCRG report on the first half of the year. And although Brooklyn real estate has seen soaring price growth, there are signs that the market could be cooling, particularly in North Brooklyn. A StreetEasy analysis in March projected that median sales prices in Northwest Brooklyn would dip by almost 2 percent over the next 12 months.

Another looming concern is how the 18-month L train shutdown, scheduled to start in January 2019, could impact Bushwick’s growing appeal. “I’m not sure if Bushwick is ready for it or they’ll make the rents,” said a local developer, who spoke on the condition of anonymity.

And although work on the site has already begun, neither developer has secured construction financing. The climate for securing construction loans in New York has tightened considerably in recent months with regard to not only luxury condos and office towers but also new multifamily projects. In terms of acquisition financing, Rabsky received $50 million from Bank Leumi, while All Year secured $70 million from Madison Realty Capital, sources said.

Dushinsky, for one, has not been as active in Bushwick as he has been in other parts of the borough. Nevertheless, Cohen dismissed the notion that he would have difficulty borrowing. “Dushinsky has the acquisition history, balance sheet and track record,” he said. “Twenty banks aren’t running after him, but I’d be shocked to see that he can’t get financing.”

He added: “Two years ago, institutional investors did not want to look at Bushwick, and now the area is being chased by institutional capital as the next North Williamsburg.”

A source close to Dushinsky said, “There’s always concern when getting into a new territory which hasn’t been tested yet. But Simon feels confident with the numbers they got for the property and the numbers for construction, and thinks he’ll be able to cover it.”

Bushwick investors and brokers are optimistic that the market will rebound in the next three years. Therefore, the projects could escape some of the market pitfalls if the timing is right. Average rents in Bushwick have seen a slight uptick, with a studio renting for $1,943 per month and a two-bedroom for $2,452 per month, according to an MNS monthly report in June. The average rent overall in the neighborhood climbed by 5.4 percent year-over-year. Inventory levels grew by 15.8 percent month-over-month in June, data showed.

Both projects will have 20 percent of the apartments reserved as affordable. The rest will be market-rate units. In June 2015, shortly after filing plans for 10 Montieth, Rabsky came under fire from community groups that accused the firm of trying to back out of its affordable housing agreement under the deal Read made. “Our main issue is none of the community benefits of the rezoning happened,” said Scott Short, assistant executive director for the nonprofit the Ridgewood Bushwick Senior Citizens Council. “We’re uncertain if the new developers will honor that. We haven’t gotten a straight answer.”

Rabsky denied the claims, arguing it has every intention of upholding the agreement. Sources close to both of the developers said that 10 percent of the 30 percent affordable housing mandate was fulfilled by giving a site to the nonprofit Churches United for Fair Housing to develop senior housing, and that they plan to adhere to the remaining 20 percent requirement.

Still, rent prices at the two projects have not yet been revealed. Sources close to both developers said the apartments will ask at least $50 to $55 per square foot in rent on average. Another source familiar with leasing in the area said he predicts market-rate rents will range from $1,900 for a studio to $5,000 for a three- or four-bedroom unit.

In general, there is a dearth of projects exceeding 200 apartments in East Brooklyn. Half a mile from the site, there is a 127-unit luxury rental at 1209 DeKalb Avenue that Read Property Group developed and sold for $58 million in 2014 just before leasing was set to begin. Rents there range from $1,775 for a studio to $3,300 for a three-bedroom. Timing will most certainly be a factor. Construction began in January, and both projects are set to be completed by early 2018, according to Chen. Cohen said that Rheingold’s units will come to the market just after the current pipeline boom slows down, allowing for an easier lease-up. “A lot of inventory is coming to market in the next 12 months, but not as much in the next 24 to 36 months, so you’ll see a second wave,” he said.

Finally, there’s the too-big-to-fail argument — that a project of Rheingold’s magnitude can withstand the market’s ebbs and flows.

As Gabriel Saffioti of Constellation Real Estate Advisors, a Williamsburg-based commercial brokerage, said, “A project that big, you can make your own cycle.”

May 3 2016
Press Release

CONSTELLATION REAL ESTATE ADVISORS EXCLUSIVELY MARKETING RETAIL AND OFFICE LOFT LEASE OPPORTUNITY IN WILLIAMSBURG BROOKLYN

-- Diagonally opposite the future Traders Joes on Kent Avenue --
-- Building offers up to ±35,000 sf of floor area located at 67-75 Metropolitan Avenue ---

NEW YORK, NY Constellation Real Estate Advisors (CREA) has been selected to exclusively market for lease a +/-36,000 retail and office loft opportunity in prime Williamsburg, steps from the new Trader Joe’s development.

Exclusive agents Ryan Reszelbach, Director of Retail Leasing, along with Founders and Partners of Constellation Real Estate Advisors Nicole Rabinowitsch and Gabriel Saffioti, are requesting proposals for this unique multi-floor leasing opportunity from prime prospective tenants.

“The owner is seeking proposals from dynamic, well-qualified tenants,” Reszelbach said. “The property’s flexible zoning, open 7,250 sq ft floorplates, soaring ceilings, and exceptional location in the new burgeoning epicenter of Williamsburg, provide this property truly unique characteristics. Lofts located in proximate to complimentary co-tenancy attract a variety of TAMI office tenants, chic fashion icons, and the preeminent food and beverage purveyors.”

Located off the first stop in Brooklyn on the Bedford L subway, the prominent 70 feet of street frontage has previously been utilized as a commercial/industrial loft. The property also has a valuable neighboring side lot which could be configured as a court yard or garden space for a tenant on the ground floor- an extremely advantageous option for retail and office tenants pining for private outdoor space in a neighborhood that covets its sparse greenspace.

The building is a short walk from a vast variety of restaurants, local and national retailers, tourist attractions, and efficient transportation via the L, J, M and G subway lines, as well as direct access to the East River ferry station at North 6th Street just 3 blocks away.

About Constellation Real Estate Advisors LLC
Constellation Real Estate Advisors LLC [CREA] is a Williamsburg, Brooklyn based brokerage that specializes in the sale of commercial, development and multi-family investment properties, as well as retail leasing and advisory services throughout the Tri-State region. The CREA team has transacted over $540 million in commercial real estate assets over the past three and a half years. Utilizing diverse knowledge, inter-office cooperation, proven experience and credulous relationships, CREA provides a symbiotic, conflict-free approach to commercial brokerage.

March 16
2016
Real Estate Weekly
Feb 25
2016
Press Release

ANNOUCEMENT

FORMATION OF CONSTELLATION REAL ESTATE ADVISORS LLC
SAFFIOTI AND RABINOWITSCH START BROOKLYN BASED BROKERAGE

Constellation Real Estate Advisors LLC announced today that they have launched a commercial real estate brokerage, consulting and advisory firm based in the Williamsburg neighborhood of Brooklyn, New York.

Constellation (CREA), founded by Gabriel Saffioti and Nicole Rabinowitsch, formerly of Eastern Consolidated, will draw upon the vast experience of its Partners to guide Constellation’s evolution from new company to local industry leader. In addition to the founding team, Constellation has engaged Leah Balkany formerly of Douglas Elliman Commercial an Investment Sales specialist, as well as Ryan Reszelbach formerly of Massey Knakal a Retail Leasing specialist. The Constellation team already amassed over five hundred and forty million dollars in commercial real estate transactions over the last five years.

Constellation Real Estate Advisors will differentiate itself from its competition by the application of four concepts, culminating in superior client service: personalized client focus service; quiet, confidential off market deals introduced to principals through personal contact rather than email blasts; collaborative team work where brokers exchange freely deals and contacts as well as exceptional professional standards of conduct through integrity, respect and continuous education.

“As a new firm, Constellation Real Estate Advisors has the ability to create our own culture while embracing creativity, technology and cooperation. Nicole and I saw a serious void in the industry and we intend to fill it with an innovative approach and an experienced team who understand the value of actually working together to produce exceptional results for our customers,” said Gabriel Saffioti, Managing Partner, Constellation Real Estate Advisors.

About Constellation Real Estate Advisors LLC
Constellation Real Estate Advisors LLC [CREA] is a Williamsburg, Brooklyn based brokerage that specializes in the sale of commercial, development and multi-family investment properties, as well as retail leasing and advisory services throughout the Tri-State region. The CREA team has transacted over $540 million in commercial real estate assets over the past three and a half years. Utilizing diverse knowledge, inter-office cooperation, proven experience and credulous relationships, CREA provides a symbiotic, conflict-free approach to commercial brokerage.

Feb 3
2016
Crain’s New York

© 2017 Constellation Commercial Real Estate Advisors LLC