Canadian REIT Acquires Majority Stake in All Year’s Gowanus Development Site
By Rebecca Baird-Remba March 11, 2024 3:04 pm
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H&R Real Estate Investment Trust, which is headquartered in Toronto, has acquired 75 percent of a large residential development site along the Gowanus Canal in Brooklyn from All Year Management for $76.5 million, according to city records made public Monday.
All Year acquired 459 Smith Street for $48 million in 2017 and proceeded to struggle with the property, taking on debt it couldn’t pay back while waiting for a city-led rezoning of Gowanus. The lender, then known as Downtown Capital Partners, started demanding that Yoel Goldman’s firm repay $66 million in debt on the property in 2020, following a default.
The city rezoned the 165,840-square-foot lot, formerly the Citizens Manufactured Gas Plant, for residential development in 2021, as part of the larger Gowanus neighborhood rezoning. Construction began in 2022, triggering a lawsuit from a local anti-development group, Voice of Gowanus. The pile-driving that angered neighbors was likely an effort to lay foundations and secure the 421a state tax abatement before it expired in June 2022.
H&R, meanwhile, had filed plans with the Department of City Planning in 2022 for a three-building, 360-unit residential complex ranging from eight to 25 stories on the property. The project could include up to 723,742 square feet of residential space and 12,773 square feet of commercial space, along with 33,000 square feet of public waterfront space, according to planning documents. Meanwhile, plans on file with the Department of Buildings—which have yet to be approved—call for as many as 900 apartments in a 29-story tower.
Goldman’s All Year managed to renegotiate its mortgages on the property last fall, consolidating its debt into a $61 million mortgage with Downtown’s successor, Plus Funding Group, an alternative lender based in White Plains, N.Y., public records show.
H&R REIT, which is publicly traded on the Toronto Stock Exchange, owns 24 properties with nearly 8,200 units across the United States, along with several million square feet of office, retail and industrial across Canada and the U.S., according to its website. The company didn’t immediately return a request for comment on the purchase.
Rebecca Baird-Remba can be reached at rbairdremba@commercialobserver.com
