Transaction of property marks completion of GFI’s successful value-add strategy and important new step for RXR’s emerging sub-market strategy; RXR previously acquired leasehold interest in adjacent commercial property from GFI
NEW YORK (August 10, 2016) — An affiliate of GFI Development Company (“GFI”), a leading New York-based developer and owner-operator, and an affiliate of RXR Realty (“RXR”), a leading real estate operating and investment company in the New York Tri-State area, announced today that GFI has sold the long-term leasehold of 810 Fulton Street in Brooklyn to RXR. The sale price was $28.7 million.
The sale of 810 Fulton Street represents the successful completion of GFI’s value-add strategy for the parking lot adjacent to 470 Vanderbilt Avenue, following the company’s repositioning of 470 Vanderbilt as a premier office property. In 2014, RXR acquired GFI’s leasehold interest in 470 Vanderbilt, a 10-story, 650,000-square-foot building, for $194.5 million.
The acquisition of 810 Fulton Street by RXR builds on recent acquisitions by RXR of almost 2 million square feet of commercial space in 470 Vanderbilt, the Standard Motor Products building in Long Island City and 47 Hall Street, adjacent to the Brooklyn Navy Yard. The acquisition further advances RXR’s New York Metro Emerging Sub-Market initiative, which focuses on undervalued neighborhoods in New York’s Outer Boroughs and suburban downtowns that have robust transit infrastructure and that RXR believes are well-positioned for investment. In connection with the Emerging Sub-Market initiative, RXR is also undertaking mixed-use development projects in New Rochelle, Yonkers, Stamford, Glen Cove, Hempstead and Huntington Station, with a pipeline of over 3,000 residential units.
“Our Emerging Sub-Market initiative grows out of our belief that the New York metropolitan region continues to have among the strongest fundamentals in the world,” said Scott Rechler, Chairman and CEO of RXR Realty. “As costs rise for commercial and residential space in core New York markets, this will create demand in new areas, such as Fort Greene and other emerging sub-markets. We know that 810 Fulton will not only benefit from this trend, but, with its mix of first-class retail and residential space, will help to make this already attractive Brooklyn neighborhood even more attractive to renters from across the City.”
Located in Brooklyn’s Fort Greene neighborhood, 810 Fulton Street is situated near a diverse array of nightlife, shopping, and dining establishments. The area has been revitalized significantly in recent years, with a range of new developments, including the Barclays Center and the adjoining Pacific Park mixed-use project. Both 810 Fulton and 470 Vanderbilt front Vanderbilt Avenue, Clermont Avenue and Fulton Street.
The approved plans for 810 Fulton, which qualifies for 421a, call for a 363-unit, 328,000-zoning square foot residential building (consisting of 393,000 gross square feet), with below-grade parking and 33,235 square feet of prime retail space facing Vanderbilt Avenue, Fulton Street and Clermont Avenue. Initial site work began at the end of 2015.
Broadway Construction Group, an affiliate of GFI Capital Resources Group, and RXR have entered into a Construction Management Agreement for the construction of 810 Fulton Street. Construction is expected to begin in earnest in Fall 2016, with leasing anticipated to start in 2018.
Since acquiring the leasehold interest of 470 Vanderbilt Avenue and 810 Fulton Street, GFI worked with various government agencies and the local community through the Uniform Land Use Review Procedure (“ULURP”) to increase 810 Fulton’s buildable square footage from approximately 100,000 zoning square feet to approximately 328,000 zoning square feet. The company received approval for its ULURP application from the City Planning Commission and City Council of New York City in 2009, with strong support from the local community, owing to the project’s proposed creation of new, quality housing, including affordable units, in a rapidly growing section of Brooklyn.
“We acquired the leasehold interest of the full city block in 2007. This marks the end of a very successful execution for us and our investors.” said Steven Hurwitz, President of GFI Development Company, an affiliate company of GFI Capital Resources Group. “We wish RXR much success on the project.”
Prior to this transaction, GFI repositioned the adjacent property at 470 Vanderbilt Avenue, transforming the formerly vacant telecom hotel into an 88% occupied office building with numerous credit tenants. After assuming the building’s leasehold, GFI and its partners made significant capital improvements to revitalize the property, ultimately securing significant leases with the New York City Human Resources Administration (HRA), the League Education and Treatment Center and the New York City Housing Authority.
“Our team has worked tirelessly for almost 10 years to develop properties that will be dynamic assets to the Downtown Brooklyn community,” added Hurwitz. “To date, our efforts have brought hundreds of construction and engineering jobs and attracted over several hundred more permanent jobs to the area. 810 Fulton Street will bring much needed high-quality housing to the neighborhood and help spur continued job growth for Brooklyn.”
About GFI Development Company, LLC.
GFI Development Company, LLC has successfully developed more than $1 billion of residential, office, retail and hospitality real estate since its inception in 2007. Led by a senior management team, GFI Development Company focuses on opportunistic investments in major metropolitan areas.
The company’s success is directly tied to its ability to identify unique opportunities, envision a new future for the property, and unlock the project’s potential by seamlessly executing development at every stage. GFI Development Company prides itself on delivering projects that benefit the communities in which they are located, while amplifying business partners’ investments by maximizing risk-adjusted returns. Current projects include the conversion 5 Beekman Street in Manhattan, a historic 19th century landmark across from City Hall Park, into a mixed-use facility that will include a 287-room hotel and 67 residential condos. The Company is currently building a 287-key boutique lifestyle hotel at Bond Street and Schermerhorn Avenue on the border of downtown Brooklyn and Boerum Hill. GFI also recently acquired the Carlton Hotel, a 317-key hotel in Manhattan’s NoMad neighborhood, which will receive large-scale renovations in the coming months. For more information, visit gfidevelopment.com.
About GFI Capital Resources Group, Inc.
Founded in 1983 and headquartered in New York City, GFI Capital Resources Group, Inc., through its affiliates, is a leading, diversified provider of comprehensive real estate and insurance services to clients throughout the U.S. Through an integrated platform of affiliates specializing in commercial real estate finance and sales, property management, insurance and real estate development, along with its hotel affiliate, GFI Hospitality LLC, GFI is powered by strong relationships with major financial institutions, capital partners and investors of real estate.
GFI has built its reputation on a steadfast commitment to maintaining the highest level of professionalism in every aspect of its business. The company’s service-oriented culture, extensive network and deep knowledge of local markets strongly position GFI to deliver unparalleled value and results. For more information, visit gficap.com.
About RXR Realty LLC
RXR Realty LLC (“RXR”) is a vertically integrated private real estate company with expertise in investment management, property management, development, design, construction, leasing and financing. RXR’s core growth strategy is focused on New York City and the surrounding tri-state area markets. The Company is one of the largest owners, managers, and developers in the New York Tri-State area. RXR’s operating platform manages 89 commercial real estate properties and investments comprising 25.2 million square feet, with an aggregate gross asset value of $14.7 billion, as of June 30, 2016. In addition, RXR has a residential development pipeline of approximately 3,000 residential units in the New York metropolitan area.
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Media Contact for RXR Realty:
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The RXR platform manages 69 commercial real estate properties and investments with an aggregate gross asset value of approximately $18.1 billion, comprising approximately 24.6 million square feet of commercial properties, inclusive of a multi-family residential portfolio of approximately 2,600 units under operation or development, and control of development rights for an additional approximately 3,600 multi-family and for sale units in the New York Metropolitan area. Gross asset value compiled by RXR Realty in accordance with company fair value measurement policy and is comprised of capital invested by RXR and its partners, as well as leverage.