ESRT Expands Williamsburg Retail Portfolio
A recent purchase of $195 million will expand the Empire State Realty Trust’s (ESRT) retail foothold in Brooklyn’s Williamsburg. ESRT will reportedly pay $103 million for the buildings that spread across five tax lots along North 6th Street between Wythe Avenue and Berry Street. Offering a combined total of approximately 38,470 square feet, of which about 28,470 square feet is commercial space, and the remaining 10,000 square feet is residential. According to city records the properties last traded for a combined total of $72,557,300 and includes 111-115 North 6th Street, which is leased to high-end brand Hermès, and the 4-building L3 Williamsburg Portfolio comprised of 81-83, 85-87, 89, and 91 North 6th Street. The remaining $92 million purchase is reportedly for another unspecified retail portfolio, also on North 6th Street. The remaining $92 million purchase is reportedly for another unspecified retail portfolio, also on North 6th Street; and although unverified, according to city records, on July 3rd, ESRT also signed a Memorandum of Contract for a portfolio with L3 Capital. Two of the tax lots host 3 buildings — 92-94 North 6th Street, 96-98 North 6th Street, and 100-104 North 6th Street offering a combined total of about 35,500 square feet, last trading for $49 million to RedSky Capital in December 2013. The other two tax lots — 124-128 North 6th Street and 130-136 North 6th Street were acquired by RedSky in August 2018 for $32.5 million as a development site but plans never moved forward. In December 2020 RedSky Capital transferred ownership of the properties on the four tax lots, along with three other parcels along North 6th Avenue plus seven parcels along Bedford Avenue to its mezzanine lender L3 Capital in a deed-in-lieu of foreclosure action.
News of the deal comes about 10 months following ESRT’s $26.4 million 1031 tax deferred exchange purchase of two adjacent properties at the northeast corner of North 6th Street and Wythe Avenue — 77 North 6th Street and 157-159 Wythe Avenue, which last traded between July and December 2019 for a combined total of $14.8 million offering approximately 5,514 square feet of commercial space and 5,915 square feet of residential space per city records. ESRT’s press release at the time indicated the properties were 100% leased as of September 30, 2023, of which the retail portion had a weighted average lease term of 7.7 years, and the residential component was comprised of (6) free-market units. ESRT Chairman and Chief Executive Anthony Malkin believes the Williamsburg neighborhood is “going to rhyme with” Manhattan’s SoHo and the Meatpacking districts, while at an investor presentation, the REIT said, “The neighborhood has seen a 56% increase in population within a mile of the North Sixth Street shopping corridor between 2010 and 2021 with 51% of households making $100,000 a year or more and more than a third making $200,000 a year or more.”