12.23.21 – “Hair care company Prose doubles its footprint in Sunset Park, Brooklyn”

As reported by New York Business Journal:

Beauty company Prose has inked a deal for 72,800 square feet at Liberty Bklyn, a 1.3 million-square-foot mixed-use property in Sunset Park, Brooklyn…

The deal represents a lease extension and expansion: Prose originally signed a 27,700-square-foot industrial lease in the same space in 2019. Since then, the company has rapidly grown.

Read the full story here.

Additional coverage from Commercial Observer:

The cost of relocating the business, and its manufacturing machinery, would also be high for Prose, Warshauer added. Though Prose has done it before, relocating from its 8,000-square-foot space at Industry City and tripling its space in 2020. Now that Prose has grown again Rayner credited the landlord for accommodating the company’s need for more space.

— Posted by JVS on 12.25.21, backdated to 12.23.21


10.20.20 – “Prime Clerk Expands at Liberty Bklyn in Sunset Park”

As reported by Commercial Observer:

Legal services firm Prime Clerk has expanded its lease at the former Liberty View Industrial Plaza in Sunset Park, Brooklyn, Commercial Observer has learned. 

Prime Clerk has signed an eight-year lease at 850 Third Avenue, an industrial and office building along the Sunset Park waterfront renamed Liberty Bklyn—growing from 18,940 square feet to 51,701 square feet, according to information from Madison Capital, which is managing the property for landlord Salmar Properties

Asking rent for office space at the property is $34 per square foot…

The 1.3 million-square-foot mixed-use building, which is home to an Amazon Prime delivery center, has been repositioned for a mix of office and industrial tenants. In 2011, Salmar purchased the then-vacant warehouse with the plan to upgrade it for a modern crop of manufacturing tenants, but pivoted to a mix of last-mile logistics and office use along the way. 

Salmar spent $140 million on repositioning the property, and, in January, the landlord received approval to lease some space to office tenants. Also in January, the building was recapitalized with a $300 million debt package led by Blackstone Mortgage Trust, along with Madison, Meadow Partners and Acadia Realty Trust, CO reported at the time. 

The building, which has floor plates clocking in at 180,000 square feet, also includes the 3.5-acre Brooklyn Grange farm on its rooftop…The large floor plates, along with a 60,0000-square-foot loading zone with 17 loading docs, support a variety of uses by industrial and office tenants.

Read the full story here.

— Posted by JVS on 10.21.20, backdated to 10.20.20

7.15.20 – Report: Liberty View Industrial Plaza changes name, seeks e-commerce, distribution, industrial, office and govt. tenants

As reported by the New York Business Journal:

Madison Capital and Salmar Properties are searching for tenants for their 1.3 million-square-foot, mixed-use property on the Sunset Park waterfront in Brooklyn.

The landlords have hired Pinnacle Realty of New York as the exclusive brokerage for leasing at the building, called Liberty Bklyn, at 850 Third Ave…

The property owners are particularly focused on signing up new tenants in the e-commerce, distribution and industrial manufacturing space, as well as in the office and government agency fields, [Madison Capital managing director Jonathan] Ratner said…

Ratner said it could be a good fit for companies looking to open offices in the outer boroughs.

“We’re experiencing an uptick in inquiries from Manhattan companies that are looking for space in Brooklyn, where a number of their employees live,” Ratner said. “We believe that’s a trend that is going to be more common as companies try to navigate their needs and how they can be most efficient in this new world.”…

Liberty Bklyn includes up to 360,000 square feet of multi-tenant office space, with units starting at 10,000 square feet. There’s about 500,000 square feet of industrial space available.

Madison Capital is pre-building 180,000 square feet of the industrial space so tenants who move in can start up operations quickly.

The property owners have worked with the New York City Economic Development Corp. on the project.

Read the full story here (paywall).

— Posted by JVS on 7.16.20, backdated to 7.15.20

2.18.20 – “Madison Capital and Salmar Properties finalize two leases at Liberty View Industrial Park: 40,484 s/f total”

As reported by the New York Real Estate Journal:

Brooklyn, NY Madison Capital and Salmar Properties have completed tenant signings of Prose, a personalized hair care brand, and IDL Communications & Electric, an electric infrastructure company that works with the MTA and Port Authority of New York and New Jersey, for a combined 40,484 s/f at Liberty View Industrial Plaza at 850 Third Avenue in Sunset Park.

Prose leased 27,681 s/f of manufacturing space for the mixing and bottling of their made-to-order shampoos and other hair care products. The brand is scaling up from its previous 8,000 s/f industrial space at Industry City. IDL leased 12,803 s/f of industrial space for the firm’s ongoing infrastructure work in the city, primarily in electric work for the public sector.

“Prose and IDL are great examples of the diversified tenant mix empowered to grow operations within Liberty View’s flexible, competitively priced offerings of industrial and office space,” said Jonathan Ratner, managing director with Madison Capital. “We are excited to welcome Prose and IDL to Liberty View and look forward to their continued success.”…

As part of Madison Capital’s recent recapitalization of the property and role as manager, the firm plans an active repositioning and marketing effort to reintroduce the property to the market. The firm is initially pre-building 175,000 s/f of affordable industrial space and will work with the community and local elected officials to attract and support Brooklyn’s small businesses.

With amenities and in-place infrastructure, in addition to a location in an ascendant economic and industrial crossroads in Sunset Park, the building provides benefits to companies seeking space. Economic incentives include a PILOT (Payment in Lieu of Taxes) program to reduce tax exposure significantly, credits from the NYC Relocation and Employment Assistance Program (REAP), the Industrial & Commercial Abatement Program (ICAP), the Industrial Business Zone (IBZ) Relocation Tax Credit and energy management programs, all of which reduce occupancy costs and empower business growth.

Read the full story here. 

— Posted by JVS on 2.18.20

2.13.20 – “Madison double deals at Brooklyn industrial plaza”

As reported by Real Estate Weekly:

Madison Capital and Salmar Properties announced that Prose, a personalized hair care brand, and IDL Communications & Electric, an electric infrastructure company, have signed a combined 40,484 s/f in leases at Liberty View Industrial Plaza at 850 Third Avenue in Sunset Park, Brooklyn.

IDL, which worked with the MTA and Port Authority of New York and New Jersey, leased 12,803 s/f of industrial space for the firm’s ongoing work in New York City, primarily in electric work for the public sector.

Prose leased 27,681 s/f of manufacturing space for the mixing and bottling of their made-to-order shampoos and other hair care products. The brand is scaling up from its previous 8,000 s/f industrial space at Industry City.

Liberty View Industrial Plaza is a 1.3 million-square-foot, mixed-use facility adjacent to Industry City in the Brooklyn waterfront…

As part of Madison Capital’s recent recapitalization of the property and role as manager, the firm plans an active repositioning and marketing effort to reintroduce the property to the market.

For the first time, there will be up to 350,000 square feet of multi-tenant office space with units as small as 10,000 s/f available at the building and approximately 500,000 s/f of industrial space for tenants of varying sizes.

The firm is initially pre-building 175,000 s/f of affordable industrial space and will work with the community and local elected officials to attract and support Brooklyn’s small businesses.


Read the full story here.

— Posted by JVS on 2.14.20, backdated to 2.13.20

2.7.20 – “Salmar Properties Violates Manufacturing Promise, Keeps the Exemptions”

As reported by Broker Pulse:

(BROOKLYN, NEW YORK)— Last week, The Real Deal broke the news the EDC, the city-affiliated Economic Development Agency, had approved Salmar Properties’ request to lease more space to office and retail tenants at Liberty View Industrial Plaza, at 850 Third Avenue in Sunset Park’s Industry City. Salmar Properties had previously promised to reserve 85% of the space for manufacturing tenants. As of May 2019, only 20% of the property had been leased to manufacturing tenants, including Amazon, notorious for its worker’s rights violations…

Gothamist’s May report also details the ample benefits that Salmar Properties received for its potential troubles. In exchange for the unusually high requirement to lease 85% of the space to manufacturing tenants, Salmar properties received $37 million in of tax breaks and an exemption allowing them to bring in large retailers like Bed, Bath & Beyond, which, along with major subsidiaries like buybuyBaby and Cost Plus World Market, currently occupies nearly 10% of the space. The current industrial tenants occupy, in total, 15% of the property.

Now, with the tax breaks and big tenants in place, Salmar Properties wants to go back on its promise, but keep the exemptions. Salmar Properties insists that the decision was necessary, presenting evidence from Goldman Sachs that the industrial space simply was not viable. For many community members, Salmar Properties’ profit margin is of little concern. Salmar will lose out on millions in tax breaks if it cannot generate 1,300 new manufacturing jobs within the next year, The Real Deal reports…

…Despite the company’s assertions that it simply couldn’t persuade desirable manufacturing tenants, notably the big Garment Industry manufacturers, smaller potential tenants claim they were rebuffed and discouraged. Bob Bland, who tried to establish a small fashion incubator at the Liberty View Industrial Plaza but felt actively discouraged, told local Latino news outlet El Deadline that she suspected the company was deliberately holding out for higher paying tenants like Amazon…

…EDC sold the site to Salmar Properties under the pro-business Bloomberg administration for a below market rate of about $8.50 per square foot. Now, the space is worth around $491 per square foot. Salmar Properties had no prior history of working with manufacturing tenants at the time, and was nonetheless trusted and tasked with leasing 85% of the space…

Read the full story here.

— Posted by JVS on 2.8.20, backdated to 2.7.20

2.5.20 – Additional documents re: Salmar Properties’ deed relief request for Liberty View Industrial Plaza

On 12.25.19, I submitted a FOIL to EDC for three additional documents mentioned in the Salmar deed relief request letter sent to EDC on 1.29.18. The documents were:

  • 1) an “attached letter from Newmark Knight Frank and Kalmon Dolgin” (wording from page 2 of the letter)
  • 2) “operating statements for calendar year 2016 and the nine months ended September 30, 2017 prepared by DDK & Company, Salmar’s accountants, along with a financing pro forma prepared by Goldman Sachs Investment Banking Division” (wording from page 3 of the letter)
  • 3) “the IDA Cost/Benefit Analysis” (wording from page 5 of the letter)

On 2.5.20, I received the following documents from EDC:

  • A “New York City Industrial Development Agency Project Financing Proposal” from 6.14.11 (the document is here)
  • A “Leasing Analysis” by Newmark Knight Frank dating from 11.21.17 (the document is here)
  • A FOIL closed letter from EDC stating that the request for the property’s “operating statements” was being withheld as it was exempt from FOIL law.

— Posted by JVS on 2.8.20, backdated to 2.5.20

2.3.20 – “Custom Hair Care Brand Prose Finds New Industrial Space in Sunset Park”

As reported by the Commercial Observer:

Personalized shampoo maker Prose is more than tripling the size of its manufacturing space in Sunset Park, Brooklyn.

The company, which is leaving an 8,000-square-foot shampoo-making facility in Industry City, has leased 28,000 square feet of space next door in Liberty View Industrial Plaza at 850 Third Avenue, according to Crain’s New York Business. Asking rent in the seven-year deal was in the low $30s per square foot, per Crain’s. 

Prose also recently leased office space at Two Trees Management’s Ten Grand Street in Williamsburg, which is the 24-story office portion of the Domino Sugar Factory redevelopment on the East River waterfront.

Read the full story here.

— Posted by JVS on 2.3.20

1.31.20 – “Blackstone Leads $300M Recap of Liberty View Industrial Plaza in Brooklyn”

As reported by the Commercial Observer:

Blackstone Mortgage Trust is leading a $300 million debt package to owner Salmar Properties, who has been embroiled with the city in efforts to walk-back a manufacturing-focused leasing and usage requirement mandated years ago after the firm received hefty tax breaks to redevelop the massive warehouse.

The financing includes $216 million in initial funding from Blackstone, Madison CapitalMeadow Partners and Acadia Realty Trust and $84 million in future commitments from Blackstone, Madison and Meadow for tenant improvements, leasing commissions and additional capital expenditures, according to information provided by Madison. The deal closed on January 17.

Blackstone provided a $203 million first mortgage consisting of $135 million in initial funding, plus $68 million in future funding. Madison, Meadow and Acadia together contributed $81 million in initial funds, with Acadia providing $54 million through a preferred debt placement, according to Madison managing partner, Richard Wagman. Madison and Meadow have also committed almost $16 million in future proceeds…

As part of the recap, Madison will assume the management and operation of the development — at 850 Third Avenue between 30th and 32nd Streets — from Salmar, who received approval from the city earlier this week to renege on the industrial-focused leasing requirement that it agreed to in 2011 after the firm proved the financial infeasibility of the business plan.

“This recap brings Madison Capital into the fold, managing the property, driving a lot of the initiatives and bringing in the active repositioning of the property,” Madison Capital managing director Jonathan Ratner told CO…

Salmar bought the asset — which is now valued at $300 million, according to Madison — for $11 million in 2011. This recap retired a $30 million loan that Salmar received from Goldman Sachs that year to fund its acquisition of what was then a vacant warehouse. Goldman provided financial analysis to help prove Salmar’s case to the city, that the asset’s sagging performance under the usage requirement had hampered its ability to cover its debt burden…

The firm is now looking to attract tenants to use the asset for light manufacturing, active warehousing, distribution and for focusing on new industry and innovation via the “makerspace” arena…

“The big picture is the Liberty View redevelopment was completed six years ago, has struggled to attract tenants and has been 70 percent vacant since it opened,” Max Padden, a vice president of real estate transactions services at the New York City Economic Development Corporation, told CO. “The retail was doing well, but the industrial portion was struggling to attract tenants. Our goal was to change the status quo and live up to the original promise [to the Sunset Park community].”

Madison will reposition the property and reintroduce it to the market, now with approval to add office tenants and make the development more profitable…

Ultimately, it was a two-year process for the EDC, with five or six months spent understanding the financials. Padden said Salmar’s original request was a blanket removal from the usage restrictions “and we said no, because it would not have been an equitable outcome. We did our own internal analysis on how it could be recapped; we understood it needed commercial; we extracted every concession we wanted; it was a tight deal.”

Padden said that base business systems essential for industrial tenants were never completed, so the development was in need of a substantial amount of capital to finish the work. He said that sagging performance had nothing to do with mismanagement or “incompetence” on the part of Salmar and that it was simply hampered by the previously flawed business plan that kept the owner from finishing up the work needed to usher in those critical manufacturing tenants…

The asset “needed higher rents to justify the expenditure,” Padden said about the new, revised plans. “The idea is to use the [rents from] commercial space to offset the cost of improvements … and that money will be used to invest back into base needs and to get industrial tenants into the building at a lower rental rate.”…

“[We really put a lot of effort in] negotiating this,” Padden said. “We held [Salmar’s] feet to the fire and told them that the usage restrictions were to remain in place no matter what.”

Wagman said: “Over 50 percent of the building will [continue to] be industrial, and we are able to offer 350,000 square feet of [rentable] multi-tenant office space that was previously not permitted at the building. We worked with the community and elected officials to provide an affordable pre-let industrial program at the building, and we’re excited to attract local and other national industrial businesses to the building and expand the industrial workforce in Sunset Park.”

The industrial space will total around 500,000 square feet, 175,000 square feet of which will be “affordable,” according to Wagman. He said his firm will work with the community to attract Brooklyn small businesses into the affordable space.

Padden said the changes to the agreement have had an immediate impact on leasing momentum. Already, the building has secured 75,000 square feet in new leasing, 45,000 of which is industrial. 

“All those tenants were able to sign those leases due to the capital infusion,” Padden said…

The development has qualified for a range economic incentives through a variety of city programs, including Payment in Lieu of Taxes, the NYC Relocation and Employment Assistance Program and the Industrial & Commercial Abatement Program , and its location makes it an Industrial Business Zone beneficiary…

“With huge floor plates, narrow columns and low ceilings, this space is best suited for hybrid space, with a mix of nascent manufacturing companies who come in and want to have their whole operation there, so industrial space and also office for their HR and [other administrative departments].”

Read the full story here.

— Posted by JVS on 1.31.20

1.30.20 – “Pols pounce as city caves in on Sunset Park property”

As reported by The Real Deal:

Three elected officials are seething about a city agency’s decision to let a Sunset Park landlord rent to office tenants at a warehouse formerly reserved for industrial use.

City Council member Carlos Menchaca and Reps. Nydia Velázquez and Jerrold Nadler have expressed “serious concerns” about the EDC’s deal with Salmar Properties to loosen deed restrictions that required 85 percent of the 1.1 million-square-foot Liberty View Industrial Plaza to be set aside for industrial tenants.

“While we have no direct authority over the approval of the proposed modification, we have serious concerns and appreciate NYCEDC’s willingness to engage with us,” the politicians stated in a letter dated Tuesday. “The residents of Sunset Park deserve to know this story.”

The trio met in November with EDC president and CEO James Patchett to discuss the proposed changes, according to the letter. The agency has now agreed to appear before Brooklyn Community Board 7 to explain the deed modifications. A date for the presentation has yet to be scheduled

So far, the new terms — as well as $117.6 million in financing from Blackstone Group which will help fund renovations — appear to have had an immediate impact. Salmar already has four new industrial tenants lined up for about 45,000 square feet of space at the building, as well as new office tenants which will occupy 30,000 square feet, according to a source close to the deal.

Read the full story here.

— Posted by JVS on 1.30.20