KKR, Dalan Management Finally Close on 260 Gold Street for $225 Million
By Celia Young June 14, 2022 1:51 pm
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Apartment operator Dalan Management and investment firm KKR closed on a deal to purchase the recently completed apartment building at 260 Gold Street in Downtown Brooklyn for $225 million — a year and a half after the contract was signed.
Brooklyn landlords Abe Mandel and Joseph Brunner sold the building through their firm Bruman Realty as part of a $1.3 billion portfolio deal for 14 other Brooklyn properties that was finalized in December 2020, according to Cignature Realty’s Peter Vanderpool, who brokered the sale. However, the sale for 260 Gold didn’t close until June 9 after Bruman wrapped construction on the 13-story apartment building last year and fully leased the property, Vanderpool said.
The Gold Street building comes with about $145 million in debt from Square Mile Capital Management, which Bruman Realty snagged in 2021 to retire $102.5 million in construction financing, Commercial Observer reported.
The portfolio deal was one of the largest multifamily transactions in Brooklyn at the time, The Real Deal reported. Most of the buildings, including the Gold Street property, were constructed under the city’s 421a tax-abatement program, which lets developers pay little to no property taxes for long periods in exchange for including income-restricted units in a residential development. The 421a program is set to expire June 15.
The 286-unit building between Concord and Tillary streets, which Brunner bought when it was an empty lot for $60 million in 2017, includes studios, one-, two- and three-bedroom apartments, 30 percent of which are set aside for residents making up to 130 percent of the area’s median income, Vanderpool said. Bruman finished construction on the 261,035-square-foot development in September 2021.
“It was the right time to sell this type of product,” said Vanderpool, who handled the deal with colleagues Lazer Sternhell and Sarah Mae Selnick. “It’s more appetizing than a rent-stabilized product.”
A handful of the other properties in the portfolio have already closed. These include three Bushwick properties (93 Linden Street for $43.9 million, 412 Evergreen Avenue for $15.7 million and 23 Menahan Street for $12.9 million), two buildings in Bedford-Stuyvesant (75 Ralph Avenue for $30.6 million and 1134 Fulton Street for $126.2 million) and two multifamily assets in Clinton Hill (10 Lexington Avenue for $46.3 million and 1-11 Lexington Avenue for $17 million), according to property records. Bruman also finalized the sale of 1056 Manhattan Avenue in Greenpoint to KKR and Dalan recently, though the price hasn’t been disclosed in property records yet, according to Vanderpool.
The portfolio also reportedly included 340 Evergreen Avenue, 889 Bushwick Avenue, 1873 Atlantic Avenue, 1428 Fulton Street and 296 Wythe Avenue, but those transactions have not yet closed or have not been disclosed in public records.
Bruman and Dalan did not immediately respond to requests for comment. KKR was not immediately available to comment.
Update: This story has been updated to indicate that the 260 Gold Street parcel sold for $60 million in 2017, not $55 million.
Celia Young can be reached at cyoung@commercialobserver.com.
