There is money to be made – big money – in New York City’s commercial real estate.
MRP Realty and AEW Capital Management reportedly purchased a warehouse in the South Bronx 16 months ago. They then leased it to Amazon. Now they are about to cash in.
The 116,000-square-foot industrial property at 1300 Viele Avenue in the Hunt’s Point section is expected to go for approximately $70 million, sources have told The Real Deal.
“The identity of the family buying the property wasn’t disclosed,” Real Deal reported. “A Cushman & Wakefield team of Adam Spies, Doug Harmon, Kevin Donner, Adam Doneger and Anthony Pasquale negotiated the deal for the sellers. Washington, D.C.-based MRP Realty teamed up with AEW Capital Management – the $75 billion real estate manager owned by French investment bank Natixis – in late 2017 to buy the two-building warehouse complex taking up a full block at 1300 Viele and 1301 Ryawa Avenues for $25.6 million.”
Only days ago, MRP announced it had secured $191.8 million for phase one of the 13-acre mixed-use development called Bryant Street in Washington, D.C.’s Edgewood neighborhood, according to a press release from HFF, which represented MRP Realty in the financing negotiations.
Industrial and warehouse properties are growing in demand as players jockey for locations close enough to permit fast delivery of products.
Some see potential trouble ahead, however. The New York City real estate market “is expected to take a hit as the result of ambitious legislation designed to push back against climate change, which includes requiring the owners of residential and commercial buildings to cut energy usage and carbon emissions or face significant fines,” Forbes recently reported. “Under one of the six bills passed as part of the Climate Mobilization Act, buildings that are more than 25,000 square feet will be required to make fixes, such as upgrading boilers and installing new windows and insulation, to become more energy efficient, with the goal of cutting greenhouse gas emissions 40% percent by 2030 and 80% by 2050.”
Beginning in 2024, the magazine continued, building owners who don’t comply “will be hit with fines totaling the difference between the emissions limit for the year and its actual emissions, multiplied by $268. Real estate industry leaders, including those involved in discussions leading up to the legislation that was crafted with the goal of it passing by Earth Day on April 22, worry that the aggressive law will further hurt the already struggling residential market as building owners are faced with making pricey retrofits and encouraging tenants to change their energy use.”