Dear CCIM Members,

We are well into the 4^th Quarter with the 2020 year almost coming to an end. Just over two weeks ago, we completed our 2^nd Virtual Dealshare event that was combined as a Region 11 CCIM event with several chapters from the Northwest Region participating with NY Metro Chapter including Upstate NY, NJ, MA and CT Chapters. This event began with market perspectives being provided by Ten-X, and how its platform has become the most relevant CRE online sales platform with 90% market share. This was followed by a property deal share event where over $18M listings, over $250M of development deals, and several leasing opportunities were presented. We will continue to expand this program and have one every quarter. We are planning an online networking event that will allow you to network with fellow members and promote the CCIM designation. Please stay engaged by helping to complete the short survey below as the information will be used to track workout activity by our members. Be sure to also attend the free Zoom events that will help you in your business!

Best,

-J.R.

(646) 481-3801

The stocks and futures markets took a dive early Friday morning, after news that President Donald Trump tested positive for coronavirus and a report showed that U.S. job growth started to slow last month, but have started to come back as the day wanes on.

Dow Jones futures dropped by more than 400 points in the morning, but have fluctuated throughout the day with some rebounds. Futures tied to the Nasdaq 100 opened with a more than 200-point drop. S&P 500 futures fell by nearly 27 points so far and have jumped around since.

Overall, U.S. equity real estate investment trusts (REITs) responded to this morning’s news by falling nearly 1.6 percent, to a low of 1,037.67, from 1,054.09 at market close yesterday. But, as of noon Friday, they have already rebounded and stabilized at just over 1,054, as per information from the MSCI US REIT Index.

Dow Jones futures dropped by more than 400 points in the morning, but have fluctuated throughout the day with some rebounds. Futures tied to the Nasdaq 100 opened with a more than 200-point drop. S&P 500 futures fell by nearly 27 points so far and have jumped around since.

Overall, U.S. equity real estate investment trusts (REITs) responded to this morning’s news by falling nearly 1.6 percent, to a low of 1,037.67, from 1,054.09 at market close yesterday. But, as of noon Friday, they have already rebounded and stabilized at just over 1,054, as per information from the MSCI US REIT Index.

Dow Jones futures dropped by more than 400 points in the morning, but have fluctuated throughout the day with some rebounds. Futures tied to the Nasdaq 100 opened with a more than 200-point drop. S&P 500 futures fell by nearly 27 points so far and have jumped around since.

Overall, U.S. equity real estate investment trusts (REITs) responded to this morning’s news by falling nearly 1.6 percent, to a low of 1,037.67, from 1,054.09 at market close yesterday. But, as of noon Friday, they have already rebounded and stabilized at just over 1,054, as per information from the MSCI US REIT Index.

U.S. equity REITs peaked at a high of 1,358.59 on Feb. 21, before plummeting 44.2 percent to 757.71 by March 23 as a result of COVID-19, according to the MSCI US REIT Index. Over the next few months, it regained its footing, making up more than 50 percent of what was lost by June 8, before leveling out and running relatively stable through Oct. 1. Mortgage REITs have followed a similar trajectory, per information from the MVIS US Mortgage REITs Index.

“[The year] began where REITs had the highest capital and lowest leverage that they’ve had in 20 to 25 years,” Calvin Schnure, senior economist at the National Association of Real Estate Investment Trusts (Nareit), told Commercial Observer in March. “They’ve lengthened the maturities on their debt, so they don’t have a whole lot of near-term obligations. They have a lot of liquidity resources; they have cash and securities but more importantly, they have lines of credit that are enough to handle a whole year, or even several years, worth of interest payments. Most REITs are pretty well covered for handling the immediate crisis. And their operating [statistics] were good; they’ve started the year with occupancy rates at or near record highs.”

Source: Commercial Observer

After Pelosi's comments regarding the gulf between the two parties' positions, she convened the House of Representatives for a vote on a revised Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act worth $2.2 trillion, CBS News reports.

The bill passed by a measure of 214-207, with 18 Democrats voting against it. Mnuchin's proposal, which White House spokesperson Kayleigh McEnany confirmed was an official offer, is an incremental increase over the previous proposal that President Donald Trump's executive branch supported, worth $1.5 trillion.

The new Treasury plan would dedicate $120B to support restaurants, entertainment venues and hotels, which had been pleading for assistance since the Coronavirus Aid, Relief and Economic Security (CARES) Act was passed in the spring.

Sen. Majority Leader Mitch McConnell called the revised HEROES Act and its $2.2 trillion price tag "outlandish" Thursday evening, likely dooming the bill to fail in the Senate, CBS reports.

The House bill included $120B specifically for restaurants and $10B for performance venues, but made no mention of hotels. Both sides included a provision for rental assistance in their respective proposals, with Mnuchin offering $60B combined for rental and mortgage assistance and the House offering $50B for renters, $20B for mortgage assistance, $4B directly for residents of public housing, $5B in homeless assistance and over $1.2B for project-based housing and apartments for the elderly and AIDS patients.

Rental assistance has been championed by landlords and tenants alike as necessary to prevent an eviction crisis once the Centers for Disease Control and Prevention's moratorium expires at the end of the year. Neither side included any forgiveness for the staggering CMBS market, where defaults have spiked and borrowers have begged for a bailout.

Both sides' proposals also included a second round of checks to be mailed directly to households, as well as a renewal of weekly unemployment payments (though Mnuchin proposed $400 per week and Pelosi proposed a return to the $600 per week program that expired in July).

One of the biggest divides between the two proposals is the amount of money that would be distributed to state and local governments, which are facing an impending budget crisis. The Treasury plan would dedicate $250B, while the House plan would dedicate over $400B.

Despite the considerable overlap between plans, McEnany said that Pelosi "was not being serious" in her negotiations with Mnuchin.

It is unclear if the Senate would even support Mnuchin's plan, which he said was under direction from Trump to grow in budget. Sen. Roger Wicker (R-Miss.) told the WSJ on Thursday that he believed that Mnuchin may have "out-negotiated his majority."

Source: Bisnow

The October market story is really complicated.

If you thought September was confusing, October is not likely to be any better, and it could be significantly rockier.

That’s because the “buckets” that have moved markets on various days in the past few months are all potentially in play:

·        Elections: Uncertainty over whether there will be a winner on election night, and President Donald Trump has signaled he may be open to challenging the results.

·        Stimulus: Can we get a last-ditch deal between Nancy Pelosi and Steven Mnuchin? The markets moved lower Wednesday when no deal was announced, so traders still care.

·        Reopening: Better economic data this week (Consumer Confidence, Chicago PMI, ADP Payrolls, Pending Home Sales) have to be balanced against an increasing sea of layoffs (Shell, Dow, Disney, Marathon Petroleum). There will be more layoff announcements as earnings are announced.

·        Treatment/vaccine: Will there be any phase three trial news on the vaccine?

·        China trade war: Any retaliation by the Chinese is likely to fall on megacap tech and semiconductor stocks that are market leaders.

·        Valuation: When Apple — the biggest stock in the U.S.— moves in a better than 20% trading range in a month, you know traders are not sure what is going on. Valuations wax and wane depending on the reopening outlook and vaccine hopes, none of which will be resolved any time soon.

All of this should be making traders nervous. With valuations high, there’s an awful lot that can go wrong.

But there is a surprising amount of optimism, at least among the professional trading community.

“Nearly every day we get economic news better than expected, and I still think that is what will win the day,” said Jim Paulsen, chief investment strategist at The Leuthold Group. “You have consumers buying. Housing and auto sales are strong. IPOs are coming back to life.”

What about a spike in infections? Paulsen acknowledges there’s concern that a spike could slow down fourth-quarter growth, which is why he believes another stimulus package is important to keep the markets going. Aside from that, he offers a novel interpretation of how to look at a fourth-quarter spike: “The country will likely start focusing more on whether the death rate spikes than the infection rate. Most of the country is operating much more safely than a few months ago, both personally and on the corporate level. So I think infections still matter, but the death rate is what will matter far more.”

Healthy correction

More layoffs coming? “It’s not good, but look at the job growth. So far there’s probably less than 50,000 announced layoffs, look at the ADP numbers. Over 700,000 jobs.”

As for valuations, many traders feel the mid-September correction, which saw the S&P 500 drop about 10% and 15%-20% declines in many megacap tech stocks, was just the tonic the market needed.

“A lot of the weak hands got shaken out during the correction in mid-September,” said Alec Young, chief investment officer for Tactical Alpha.

“We are still 200 points below the old high in the S&P,” he said. “The market may need a while before it can make a new high, but there are more risks of being out of the market than being in. As long as we get a fiscal deal, the market will grind higher.”

One last positive note: As we enter earnings season, the early reports have been almost all positive, and earnings have been slowly creeping up, not down.

“There are a lot of uncertainties, but there is so much going right analysts and companies are going to revise their estimates upwards,” Paulsen said. “Wall Street is going to be revising up not just its fourth quarter, but it’s 2021 numbers as well.”

Source: CNBC

When states around the country essentially locked down to help curb the spread of COVID-19, outlet centers, like regional malls, were forced to temporarily shutter, which took its toll on the sector.

“Outlets are one of the property types most impacted by COVID, with very low rent collection in second quarter, though rent collection has improved since stores have reopened,” notes Ana Lai, senior director and real estate sector lead at S&P Global Ratings.

With many stores reopening at limited capacity, COVID-19 is upending much of the retail sector as landlords, in general, are still only collecting less than 80 percent of rent.

S&P covers Tanger Factory Outlet Centers Inc.—one of the biggest players in the outlet center space—and recently revised the REIT’s outlook to negative.

“The negative outlook reflects our concerns about the potential negative effects of the coronavirus pandemic on Tanger’s sales and cash flow,” according to S&P’s research. “We believe Tanger… could face material top-line headwinds in the next few quarters because of the coronavirus pandemic impacting outlet operations and growing exposure to tenant distress.”

However, outlet centers’ and other retail centers’ woes started before the pandemic.

For U.S. retail, in general, there’s too much gross leasable area and not enough retailers to fill that space, says Frederick J. Meno, president and CEO of asset management and asset services for The Woodmont Co. The firm takes over management of outlets centers, regional malls and open-air centers that have been taken back by lenders.

Additionally, online shopping continues accelerating and competing with bricks-and-mortar retail, and many retailers have extremely over-leveraged balance sheets, Meno notes.

“If a mall or outlet center were at a tipping point when COVID hit, then that was kind of the last straw,” he continues.

“In the past six months, we’ve taken over more mall and outlet center third-party management assignments than we have in the previous two and half or three years. It’s only going to increase in the next couple of years,” Meno says.

Since March, Woodmont has taken over receiverships of three outlet centers located in Oshkosh, Wis., Freemont, Ind.; and Burlington, Wash. The first step for the company is to stabilize the rent roll. In order to do that in the middle of a pandemic that has brought with it widespread shutdowns, it required lease negotiations and modifications with almost every tenant, Meno says.

However, typically, Woodmont will not abate rent without getting something in return, perhaps, an extended lease term. “We will not waive rent without making it a win-win situation for both [landlord and tenant],” he notes. But the company will defer rent for retailers needing rent relief, which can be paid back over an extended period of time.

The challenge with distressed outlet centers, according to Meno, is getting the vacancies leased, and they’re looking for multi-regional and national tenants, as well as local and in-market opportunities.

“Pre-COVID, our playbook was strongly tilted toward going after food and beverage and entertainment concepts like movie theaters, escape rooms, trampoline parks and laser tag, and strong food court and sit-down dining options. Those were key drivers,” he says. COVID-19 and social-distancing protocols have changed that, at least temporarily.

Outlets under pressure, but better positioned than malls

“Like most of retail, outlet centers are under pressure,” says Neil Saunders, managing director at research firm GlobalData Retail. This is especially so because outlet centers tend to focus on discretionary goods like apparel, and consumers have cut back on the amount they spend on clothing during the pandemic.

“That has reduced footfall and revenue,” Saunders notes.

Apparel is overrepresented in outlet centers, and “it’s the one category that has just got hammered the last couple of years,” Meno points out.

That said, Saunders says outlet centers are in a better position than most regional malls for several reasons. The value focus is one of them, in tune with frugal consumers, he notes. Second, is that outlets feature well-known brand names, which are still attractive to shoppers. And third, most outlet centers are outdoors, which helps instill confidence in consumers regarding lower infection risk and helps with social distancing compared to enclosed malls, Saunders adds.

Outlets ‘check that box’

“The consumer wants a clean, safe, open-air environment, which is what they feel most comfortable in, so we definitely check that box,” says David Hinkle, a principal with Outlet Resource Group, a Chicago-based outlet center consulting company. “And while the industry typically has done well in good times, when times get a little troubled, it does even better.”

It definitely seems like outlets are in a better position than malls due to their outdoor nature, as well as the discount merchandise they typically carry, agrees Nikki Baird, vice president of retail innovation at Aptos, an Atlanta-based retail technology solutions provider.

“Outdoor helps protect against the physical impact of COVID, and their discount reputation helps with the economic impact,” Baird says.

Foot traffic increasing faster at outlets than malls

While the pandemic has negatively impacted malls and outlet centers financially, foot traffic has been increasing for both sectors since May, according to an August S&P Global Market Intelligence report. Outlet center foot traffic is climbing faster, however.

S&P utilized data for its report from AirSage, which collects and analyzes real-time mobile signals, GPS and other location data to track movement patterns.

AirSage data shows foot traffic to U.S. malls owned by publicly-traded REITs was down around 15 percent year-over-year during the week ending Aug. 9, while foot traffic at outlet centers was slightly higher than 2019 levels.

The analysis included properties owned by Tanger, Simon Property Group Inc., Taubman Centers Inc., Macerich Co., Brookfield Property REIT Inc., Washington Prime Group Inc., Pennsylvania REIT and CBL & Associates Properties Inc.

Tanger's portfolio showed the fastest foot traffic recovery, likely attributed to the outlet centers’ open-air environment. Stores at Tanger's outlet centers steadily reopened throughout the second quarter as states started lifting closure mandates. By the end of July, 95 percent of Tanger's occupied stores had reopened.

“Basically, when the mandates were lifted, people were excited to get out of their houses and go to shop," said Tanger CEO Steven Tanger during the REIT's second-quarter earnings call.

Meanwhile, properties owned by Simon saw a similar trend, with the REIT’s outlet centers showing a faster recovery than its enclosed malls.

“I do think the consumer generally feels a little more comfortable in the outdoor environment," said Simon’s CEO David Simon during the company's recent earnings call. Simon added, however, that increased foot traffic was also correlated with a lower prevalence of COVID-19 cases in a given location.

What about outlets’ lack of e-commerce?

The lack of investment in e-commerce is “definitely a disadvantage” to outlets, Baird points out.

Any retailer or property without an online offer will find it much harder to generate trade now that so many consumers are shopping digitally, Saunders agrees. That said, Saunders notes that there have been attempts to put the outlet experience online, including from Simon, which has built online portals for some of its outlet centers.

It’s not all doom and gloom for outlets, Saunders continues.

“Many people still want to shop physically, especially to browse for bargains, and many still like visiting centers for enjoyment or leisure,” he says. “Online can’t completely replicate all aspects of the physical experience.”

Some retailers in outlets struggle

Some brands with stores in outlet centers are filing for bankruptcy, including Children’s Place, Brooks Brothers and Justice.

“I wouldn’t look to outlets as the driving factor in these bankruptcies,” Baird notes. “Those retailers filing early in the pandemic, and pretty much … right up to the month of December, were already financially weak and vulnerable to a shock like a pandemic.”

What will be more interesting to watch is what happens coming out of the holidays, she notes.

“Retailers who can keep tight control of their inventory and find creative ways to expand their effective selling capacity to meet typical holiday demand, but with social distancing, etc,. are the retailers who will be well-positioned for spring, and hopefully, the beginning of recovery.”

The collapse of some large brands could hurt outlet centers, especially if they opt to shut stores there, Saunders notes. “However, outlet stores can be good performers for many brands, so these locations may be more sustainable as distressed retailers work out what their store strategy should look like,” he says.

In the case of Brooks Brothers, Simon now partly owns the brand, so they’re in control of which stores will stay open and which will close, Saunders says. Simon owns a lot of outlet centers, so this move will help it keep stores open in its locations.

Source: National Real Estate Investor

Wall Street’s alchemists are at it again, this time spinning supposedly safe investments out of the pandemic-stricken market in commercial real estate.

In a maneuver that recalls the complex home mortgage investments in the mid-2000s, Cerberus Capital Management has used relatively low-quality commercial mortgage bonds to create triple-A debt. Although the investment firm didn’t invent these securities, it’s selling them at a moment when the property market is being clobbered by the pandemic.

Around 9% of commercial mortgages that have been bundled into bonds were delinquent in August, according to data from research firm Trepp, as Covid-19 keeps shoppers out of malls, travelers away from hotels and workers home from offices.

But the challenges to the commercial real estate market also mean that hedge funds are looking for opportunities to profit amid the fallout. The Cerberus securities mature in essentially 2.2 years, and the AAA portion is being marketed at a price of between 1.4 and 1.5 percentage points over benchmarks, according to people with knowledge of the matter. The high ratings combined with relatively high yields and short-term maturity could attract some investors.

“I’m sure the ratings are what’s driving the demand,” said Jason Callan, head of structured assets at Columbia Threadneedle Investments.

Cerberus is taking derivatives of commercial mortgage bonds, known as interest-only strips, and packaging them into around $390 million of notes, about $300 million of which have top ratings from DBRS Morningstar. Most of the commercial mortgage securities at the foundation of this transaction have the lowest investment-grade rating, BBB-, but through the magic of securitization they’re transmuted into AAA instruments, similar to subprime mortgage bond derivatives that were bundled into top-rated collateralized debt obligations during the U.S. housing bubble.

“This is a CDO,” said Jen Ripper, an investment specialist at Penn Mutual Asset Management in Horsham, Pennsylvania. “There could be a real risk of some principal loss at the BBB- level, which most of these interest-only tranches are ‘stripped’ off of.”

The transaction is being referred to as a “resecuritization” in deal documents seen by Bloomberg. Those marketing materials say it’s structured so that cash flows have some protection from early repayment of principal through refinancing, and losses due to defaults.

The deal is backed by about 9,300 mortgages, 27.6% of which are office, 25% retail and 15.5% hotel, while the rest is a mix of other commercial real estate sectors, initial marketing materials show.

CMBS interest-only strips are linked to the performance of corresponding bonds with the same ratings that pay both principal and interest. They represent securities backed by the excess interest generated from a pool of commercial mortgages.

A representative from DBRS Morningstar said that the ratings are still pending and that no presale report was available yet. A representative for Cerberus didn’t immediately provide a comment.

The deal is being arranged by Deutsche Bank AG, JPMorgan Chase & Co., and Wells Fargo & Co. Representatives for JPMorgan and Deutsche Bank declined to comment while a press officer for Wells Fargo didn’t immediately provide a comment.

Source: Bloomberg

KEY POINTS

·        The American Dream megamall in New Jersey has been dark for almost seven months during the coronavirus pandemic.

·        It reopens its doors Thursday, this time with retail stores.

·        The reopening of the property, which comes ahead of the 2020 holiday shopping season, will put Triple Five’s model of touch-and-feel experiences alongside retail to the test, in the middle of a global health crisis.

American Dream megamall and entertainment complex in East Rutherford, N.J. After more than 17 years in the making, it finally opened October 25, 2019. Then came the coronoavirus pandemic.

American Dream megamall and entertainment complex in East Rutherford, N.J. After more than 17 years in the making, it finally opened October 25, 2019. Then came the coronoavirus pandemic.

It was March 16 — just three days ahead of the grand opening of dozens of retail stores at the American Dream megamall in New Jersey — when the 3-million-square-foot complex shut down due to the coronavirus pandemic.

Ongoing construction was halted. Attractions, like a Nickelodeon Theme Park that opened in the fall and an indoor ski slope that opened during the winter, were closed. And a VIP event to celebrate the debut of the DreamWorks Animation Water Park was called off. Triple Five Group, the property’s owner, hoped it would be a short delay — just another in a series of setbacks the project has seen over its nearly two-decade-long history.

Almost seven months later, American Dream is finally swinging open its doors to the public. Visitors will be able to purchase tickets to attractions including an NHL regulation-size ice rink, an indoor ski slope and an Angry Birds-branded mini golf course. Retailers including Zara, Lush, Primark, Aritzia and American Eagle, will also open there for the first time.

The Covid-19 pandemic has upended the retail industry: It has pushed dozens of companies into bankruptcy court and resulted in thousands of layoffs. It’Sugar, which boasts a towering candy store next to the water park at American Dream, filed for bankruptcy protection last month. A location planned in the megamall’s luxury wing for Barneys New York, which liquidated after filing for bankruptcy last year, must still be filled.

These tenants’ troubles affect Triple Five, which also operates the Mall of American in Minnesota.

The property owner has struggled to pay its own bills during the pandemic. Triple Five remains more than 90 days delinquent on its $1.4 billion mortgage for Mall of America, according to Trepp, a New York-based research firm that tracks the commercial mortgage-backed securities market. The value of the mall was recently reduced to $1.94 billion from $2.3 billion, Trepp said. And Triple Five actually used Mall of America, the largest U.S. mall, as collateral for an American Dream loan.

American Dream co-CEO Don Ghermezian told CNBC in an interview in early April, shortly after the megamall was shut: “The difficulty we are going though now ... if tenants don’t want to pay rent, my response is: ‘I have got to pay a mortgage. I borrowed money. I have got to pay back my lenders.’”

A spokeswoman for Triple Five told CNBC this week: “We are making positive progress with our lenders, and reopening American Dream is another step forward.”

With Thursday’s grand reopening comes hope for fresh revenue. American Dream’s owners are betting on restless parents bringing their kids to ride roller coasters for the afternoon, with their masks on. They’re betting on nearby New York residents hopping over on the train to complete their holiday shopping, albeit socially distanced. New Jersey, which is home to some of the best-performing malls in the country, doesn’t have anything quite like American Dream, which sparks some optimism.

“If you’re going to go one place ... post-Covid with your family, first, you want to go somewhere where you feel safe,” Mark Ghermezian, co-CEO of American Dream and Don’s cousin, said during an interview from the complex earlier this week. “Our whole thing is, if we can get people to come in to buy tickets and come to experiences, then our shopping and food will flourish.”

Even as spending picks up online at a record clip during the pandemic, instilling new and permanent consumer behaviors, American Dream is still betting big on brick-and-mortar retail, though the mall skews heavier on entertainment tenants.

“We believe, if you’re going to choose to go shopping somewhere, you’re going to go somewhere that’s new and fresh and exciting and different,” Mark Ghermezian said.

“I think this [pandemic] is just going to accelerate what’s happening” in retail, he added. “What I mean by that is, a lot of the C- and D-player malls or C- and D-store concepts, right, may not be around for much longer. It accelerates the value of our centers and what we’re doing.”

American Dream will put Triple Five’s model of touch-and-feel experiences alongside retail to the test.

“We don’t view ourselves as a shopping center,” Mark Ghermezian said. “We’re a destination.”

The pandemic has prompted Triple Five to put in place a number of safety precautions. Capacity at the center will be capped at 25%, to allow for social distancing. Facial coverings are required — unless you’re going down one of the water slides. Visitors to the Nickelodeon Universe Theme Park and DreamWorks Water Park will have their temperatures checked through thermal body scanners. Operating hours will be reduced. And fresh signage throughout the mall is embellished with its new ”#DreamSafe” motto.

The retailers at the megamall will open on a rolling basis, according to the Ghermezians. The luxury wing, which includes a sprawling Saks Fifth Avenue department store, Gucci, Hermes and Louis Vuitton, is now slated for a March debut.

Many of the food options are still being completed and are expected to open up this year or next.

But the industry’s turmoil is ongoing, on pace to rival 2010, when 48 retailers filed for bankruptcy coming out of the Great Recession, according to BDO USA. The professional-services firm tracked 18 retailers filing for Chapter 11 protection during the first six months of 2020, followed by another 11 from July to mid-August.

Many of the tenants at American Dream and Mall of America have been looking for breaks on rent, due to the pandemic, which caused prolonged store closures, according to Triple Five. And while rent collection appears to be ticking back up, tensions between tenants and their landlords persist industry wide, likely lasting into 2021.

‘You’ve got to give them credit’

And so as American Dream reopens with retail Thursday morning, it will go head to head with a some nearby shopping malls in New Jersey, including Brookfield’s Paramus Park and Westfield Garden State Plaza.

“They were thrown a number of obstacles, but you’ve got to give them credit, as this is maybe their third try,” said Mark Hunter, managing director of retail assets for the commercial real estate services firm CBRE. “You’ve got to take a step back and say, ‘There are not too many developers that would have the wherewithal to pull this off.’”

Source: CNBC

Prime Storage Group has picked up an assemblage of six properties in the Highbridge section of the South Bronx for $28.5 million, according to brokers involved in the deal.

The series of connected storage facilities, warehouses and parking lots include 950 University Avenue, 969 Summit Avenue, 971 Summit Avenue and 973 Summit Avenue, plus a sixth unaddressed lot. The assemblage runs through the block between West 162nd and West 164th streets, next to the Major Deegan Expressway.

The sale is one of the largest commercial deals in the Bronx this year, and the largest Bronx storage facility transaction since 2017.

Prime Storage plans to keep and expand the existing storage facilities, but the site has significant development potential for a mixed-use project (like many sites in the South Bronx). The lots offer roughly 300,000 buildable square feet for future residential and commercial development. The current buildings span about 124,000 square feet of commercial space, although only 67,000 square feet of that is currently rentable as storage.

Matt Sprayregen from Knickpoint Ventures was the seller. Itan Rahmani and Yehuda Goltche of Venture Capital Properties handled both sides of the transaction.

“Given the unique challenges presented by COVID-19, we thank everyone who was involved and are happy to have seen this deal to fruition,” Rahmani said in a statement. “This is the largest transaction that has closed in the Bronx since COVID began and the second-largest storage trade in the borough since 2012, with the largest facility also being purchased by Prime at 1260 Zerega Ave in 2017.”

Source: Commercial Observer

Ian Grusd, CCIM, SIOR

Chapter Past President

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