Sherwood Equities Sells Long Island Industrial Portfolio for $76M
The sale signals a high water mark for transaction activity on Long Island
By Cathy Cunningham August 10, 2022 3:30 pm
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Blake Silverman’s Silverman Group has acquired a nine-asset industrial portfolio in Long Island from Sherwood Equities, Commercial Observer has learned.
The purchase price for the buildings — which comprises 372,000 square feet of industrial buildings spread across Melville and Farmingdale, N.Y — was $76 million. Cushman & Wakefield (CWK)’s Adam Spies, Gary Gabriel, Adam Doneger, Kyle Schmidt and Rachel Humphrey arranged the sale.
The portfolio was built at a cost of $5 million in the 1970s by Ira Katz and his son Jeffrey Katz — the latter now known as the prominent developer behind the reshaping of Hudson Yards, Times Square and the High Line. The buildings have been owned and operated by the Katz family since then, achieving occupancy rates in excess of 90 percent for several decades now.
Today, the portfolio is 98 percent leased with an average rent of $8.10 per square foot, roughly half today’s average market rate, presenting a value-add opportunity for the new owner.
Additionally, the buildings sit on the border of Suffolk and Nassau counties and are minutes from the Long Island Expressway, benefiting from lower property taxes while in close proximity to New York City. Roughly 6 million consumers are within a 60-minute drive of the portfolio, and more than 14 million consumers are within 90 minutes.
In December 2021, Sherwood Equities also sold the retail condominium at 1600 Broadway to Paramount Group for more than $190 million, the Wall Street Journal reported, in a deal also led by C&W’s Spies and Doug Harmon.
Typically, the company is a long-term owner and operator of properties. However, “the current industrial environment made it too compelling not to harvest the [Long Island] portfolio now,” Mark Roth, senior vice president of Sherwood Equities Long Island, said.
Additionally, recent asset sales within the multigenerational firm’s portfolio reflect a diversification in strategy to encompass not only pure development plays but also an increased focus on new investment and lending opportunities within New York City. Proceeds from the two recent sales will be invested into the firm’s future, broader investment strategy.
Sherwood Equities was founded in 1949 when Ira Katz and his brother Howard Katz built over 1,000 single family homes on Long Island following World War II. Today, more than 70 years later, its impressive portfolio spans multiple asset classes including office, retail, multifamily and hospitality.
On the lending front, the firm has historically provided higher leverage mezzanine land loans— in locations such as Brooklyn’s Gowanus neighborhood and the Mott Haven section of the Bronx — and is finding new and interesting mezzanine lending opportunities in the current market environment, Jonny Snider, senior vice president of acquisitions and development at Sherwood, told CO.
Officials at Silverman Group and C&W didn’t immediately return a request for comment.
Cathy Cunningham can be reached at ccunningham@commercialobserver.com
