Turning a page and beginning a new chapter in its history, the Watchtower Bible and Tract Society of New York is closing on the sale of five of six of its Brooklyn properties. Watchtower, a legal entity of the Jehovah’s Witnesses, finalized the deal last month for $375 million, making way for the relocation of its world headquarters to upstate Orange County.
A joint venture of RFR Realty Corp., Kushner Companies and equity investors has acquired 117 Adams St.; 77 Sands St.; 55 Prospect St.; 81 Prospect St.; and 175 Pearl St. A sixth property, 90 Sands St., a 30-story residential property for members of the organization, is expected to close in 2017. The properties range in size but encompass a total of 1.2 million square feet.
The buildings were “quite significant” to the Jehovah’s Witnesses and represent a major part of the organization’s history, David Semonian, a spokesman for the Witnesses said in a video release. Over the course of 77 years, the facilities were used to print and produce Bibles and Bible-based materials, he said.
A team from Greenberg Traurig represented RFR Realty and Kushner in the complex deal that included joint venture agreements, acquisitions, leaseback components and financing. The team was led by Robert Ivanhoe, chair, global real estate practice; Stephen Rabinowitz, chair, New York real estate practice; Deirdre Carson, Joseph Farrell and Kristen Lonergan, shareholders; John Mascialino, chair, New York government law and policy practice; and Adam Goldstein, associate. In addition, William Siegel, cochair, of the firm’s Miami practice, represented the joint venture.
Stephen Lefkowitz, a partner at Fried, Frank, Harris, Shriver & Jacobson and associate Tannaz Simyar represented Watchtower. Brian Lichter, who at the time was a partner at Fried Frank, was also on the team. He is now a partner at Davis Polk & Wardwell.
Watchtower was represented in-house by Richard Moake, associate general counsel in Patterson, N.J.
Fried Frank is also counsel to the Kushner Companies in the rezoning of the properties. Lefkowitz,along with Richard Leland, partner, and Zachary Bernstein, associate, are handling the rezoning of the site.
“We’re buying some really first-rate buildings,” Jared Kushner, CEO of Kushner Companies and owner of the Observer Media Group, told the Witnesses in an online video interview.
The buildings, which connect DUMBO and downtown, are situated in the “Brooklyn tech triangle” and have the “ability to be the heart of the triangle,” Kushner said. The Watchtower properties were reportedly zoned for commercial and manufacturing use.
The new ownership will reportedly undertake a $100 million renovation to reposition the buildings to include 150,000 sq. feet of retail space and pedestrian plazas. CPX Real Estate has been appointed to market and lease the buildings’ retail space with an eye on Brooklyn-based business, according to the Commercial Observer.
In 2012, the Witnesses closed on the sale of another Brooklyn property, the Hotel Bossert, at 98 Montague St., for $81 million (NYLJ, Nov. 28, 2012).
The Jehovah’s Witnesses began moving its printing and shipping operation to Wallkill, N.Y., in 2004. In July, construction began on a new world headquarters in Warwick, N.Y., which is expected to be completed in 2017.
Global One Real Estate Fund has recently acquired the Promenade Apartments, a state-administered Mitchell-Lama building, at 150 W. 225 St., for $18.5 million.
Global One purchased the residential building in conjunction with the NYAH Preservation Fund, a joint venture of Citi Community Capital and L&M Development Partners. The seller was Promenade Apartment Associates.
Built in 1972, the 318-unit, 32-story property is located near Terrace View Avenue and Teunissen Place, in Marble Hill, and overlooks the Harlem River.
Martin Luskin, a partner at Blank Rome, David Brier, of counsel, and associate Kim Li Khutorsky represented Global One.
Jeffrey Lenobel and Susan Frunzi, partners at Schulte Roth & Zabel, along with Gregory Pressman, of counsel, and associate Joshua Cohen, represented Promenade Apartments. Lenobel also chairs the real estate group and is a member of the firm’s executive and operating committees.
In addition, Richard Singer, a partner at Hirschen Singer & Epstein, was special counsel to the seller. Singer is also cochair of the committee on low-income and affordable housing of the real property law section of the New York State Bar Association.
The new owner has “many years of experience in acquiring and rehabilitating affordable housing projects,” Adelaide Polsinelli, senior director at Eastern Consolidated, said in a statement.
Global One has plans to “infuse the property with significant funds, enabling it to remain competitively affordable,” she said. Polsinelli and Scott Ellard, director of financial services at Eastern, acted on behalf of the seller and procured the buyer.
The new owner hopes to maintain affordable housing by dissolving Mitchell-Lama and creating a regulatory agreement with the Department of Housing Preservation and Development, Robert Nelson, a principal of Global One, told The Riverdale Press. Michael Gerstein is also the group’s principal.
The Promenade is comprised of 126 one-bedroom units; 127 two-bedroom units and more than 60 three-bedroom units and is currently 96 percent tenant occupied. The average size of a one-bedroom unit is about 675 sq. feet.
Some of the improvements reportedly will include new lobbies, elevator cabs, roof, boiler, and updating other building systems, with an emphasis on lowering operating expenses and improving tenant amenities. The new owner intends to pursue LEED certification for the property, Ellard said in a statement.
Global One specializes in locating investment opportunities in middle income and affordable properties in need of significant capital work. Since 1996, Global One Investments has acquired more than 2,500 units in 15 properties, valued at over $255 million, according to its website.
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