Est4te Four Set to Close $110M Sale of Long-Shot Red Hook Office Development [Updated]
Italian developer Est4te Four plans to sell for more than $100 million six Red Hook industrial properties where it had planned a massive office project, Commercial Observer has learned.
Sitex, an industrial investment firm based in Englewood, N.J., is set to purchase the assemblage on the Brooklyn waterfront for $110 million early next week, according to a source familiar with the deal who spoke on the condition of anonymity.
Brian Milberg, a principal at Sitex, declined to cite the price, but confirmed that his company is buying the six properties, which encompass several buildings totalling 1.2 million square feet. The assemblage includes 219 Sullivan Street, 68 and 100 Ferris Street, and 242 Coffey Street. A representative for the owner told CO that the 170,000-square-foot red brick warehouse at 202 Coffey Street is not included in the sale, and it will continue to be used for film and photography shoots.
Milberg said that he intends to keep the sites industrial, rather than converting them to office space. “We intend to reposition what’s there and modernize the buildings and rent them out,” he said.
Est4te Four has gone on quite a journey to develop these properties, after purchasing them for $66 million in September 2014, property records indicate. The Milan-based real estate firm struggled to find financing for its ambitious office complex, dubbed Red Hook Innovation Studios. Investors shied away from the neighborhood’s untested office market and a flood-prone location where the closest subway station was a mile and a half away. The developer had planned to restore the warehouse at 202 Coffey Street, and on the remainder of the sites, construct four new office buildings of up to seven stories each, The New York Times reported in early 2015. It hoped to spend $400 million redeveloping the decaying warehouses over a five-year period.
In August 2015, Est4te Four started marketing the sites as an investment opportunity, seeking a partner who would pump $100 million in the development, Crain’s New York Business reported at the time. Then a year ago, the developer pulled the sites off the market, according to the Brooklyn Eagle.
With additional reporting provided by Cathy Cunningham and Liam La Guerre.
Update: This post has been updated to reflect the fact that 202 Coffey Street was not included in the $110 million sale; and in an earlier version Brian Milberg’s name was misspelled.