AZW Realty Buys Gowanus Warehouse Site for $18M to Build Apartments

The residential construction boom happening in Gowanus, Brooklyn, after a rezoning of the industrial neighborhood continues as AZW Realty has acquired a 59,995-square-foot development site at 224 Third Avenue from Slate Property Group for $17.8 million, Commercial Observer has learned. 

The site is currently home to a small warehouse. AZW plans to erect an 80-unit residential building on the site, with a portion of those units designated as affordable housing under the old 421a tax incentive, which Gov. Kathy Hochul extended for certain projects in the neighborhood, Sean Kelly, a partner with Ariel Property Advisors, told CO. 

Kelly, along with Ariel colleagues Stephen Vorvolakos and Nicole Daniggelis, brokered the sale for Slate Property, while AZW represented itself in the deal. AZW could not be reached for comment. 

“They’ve got a big portfolio and the timing was right for them,” Kelly said of Slate’s decision to sell the property. “It was more of just a strategic sale.”

The Gowanus neighborhood has been transforming thanks to a 2021 rezoning, which has resulted in new developments, including a surge in demand for high-rise residential and mixed-use projects.

“The Gowanus is the most comprehensive rezoning we’ve ever seen in the city of New York,” Kelly noted. “We struggle in New York City with the shortage of housing and it’s going to produce 8,000 new units [in the next five or six years], about 25 percent, if not 30 percent, of which will be affordable housing.” 

The rezoning also provided developers with zoning incentives to create what Kelly called “the Gowanus mixed-uses,” which is the development of industrial or creative spaces in the neighborhood. 

“There’s probably already 1,000 units that have probably already come online in the last couple of months,” he continued. “We’ll have another 1,000 units online, I think in the next year.”

Other recent transitions in the Gowanus neighborhood include Avdoo & Partners‘ $29 million purchase of a two-story industrial building at 601 Union Street as well as Tavros Capital and Charney Companies‘ more than $160 million purchase of an empty development site at 175 Third Street from RFR Holding.  

Gowanus is an attractive neighborhood for residential development because of the surrounding brownstone neighborhoods, including Park Slope and Carroll Gardens, Kelly said. 

“So you’re sandwiched in between these brownstone neighborhoods, and on the east side of the canal you have access to the trains on Fourth Avenue,” he said. “We had a lot of industrial space or land that was manufacturing zoned, and it just wasn’t being put to its highest or best use [until the rezoning].”

Amanda Schiavo can be reached at aschiavo@commercialobserver.com.