Deal Highlights

Sales Price: $7,200,000

Price per Square Foot: $327

Existing Square Feet: 22,000

Lot Area/Dimensions: 32,377/156′ x 217′

Seller Profile: Non-Profit School

Property Type: Development

Buildable Square Feet: 80,000

Price per Buildable Square Feet: $90

Matthews™ is pleased to announce the successful closing of 1377 Brooklyn Avenue in Flatbush, Brooklyn. This notable property, featuring a vacant 22,000 SF dormitory school building with an additional 80,000 buildable square feet for residential development, was sold for $7,200,000, equating to an impressive $327 per square foot on the existing structure and $90 per buildable square foot. The property, sold by Cristo Rey Brooklyn, a nonprofit charter school, was purchased by a local Brooklyn developer with plans to build a mixed market rate/affordable or fully affordable housing building. This section of Little Haiti Flatbush is primed for new affordable housing dwellings and has seen many successful projects in recent years.

We Faced Many Challenges

COVID-19 – Marketing for the property began in April 2020, during the COVID-19 pandemic and mandatory government shutdowns, which severely impacted market conditions and our ability to effectively market the property.

421-a Expiration – In 2022, the expiration of the 421-a tax abatement significantly reduced the pool of developers willing to build multifamily projects in the boroughs. Without this tax abatement, developers struggled to underwrite multifamily projects, rendering the site’s additional air rights relatively worthless for future residential development until a replacement program was implemented.

Lot Subdivision | Transfer of Air Rights – Initially, the subject building was on the same tax lot as 710 E 37th Street. Before the sale, the zoning lots needed to be subdivided and the air rights transferred. Additional easements were also required to make the site viable for future development. Our expertise in selling development sites and working with Brooklyn nonprofits enabled us to guide our client through this complex process.

High Interest Rate Environment- During the marketing period, the Federal Reserve’s rapid rate hikes affected buyers’ ability to secure favorable acquisition and construction financing. This impacted the buyer pool and overall market pricing. Through our strong relationships with Capital Markets brokers, we secured the best financing options for both the buyer and seller, ensuring that all outstanding debt obligations were met upon the sale.

The Outcome

Despite numerous challenges, including the pandemic, 421-a tax abatement expiration, lot subdivision, air rights transfer, and high interest rates, expertise, resilience, and strong market relationships led to a successful sale, achieving outstanding results. Our expertise in selling development sites and experience working with Brooklyn nonprofits enabled us to coach our client through the complex process of lot subdivision and air rights transfer, ensuring the site’s viability for future development.

Furthermore, our strong relationships with Capital Markets brokers helped us secure favorable financing options despite the Federal Reserve’s rapid rate hikes, which affected every buyer’s ability to obtain acquisition and construction financing. Through consistent marketing efforts, resilience, and grit, we stayed on the course and achieved a favorable outcome for both parties.

Please reach out to learn more about this transaction and available inventory.

All the best,

Jermaine Pugh