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Long-Term Ground Lease Offered for NYC Waterfront Site

A long-term ground lease for one of the largest available sites for development on the Brooklyn waterfront—a 16-acre parcel that has been designated as a federal Opportunity Zone—has been put on the market by the family that has owned it for decades.

The 16-acre parcel on Shore Parkway on the eastern shore of the Gravesend neighborhood of NYC will be sold by JLL, which said it is seeking either a 49-year or 99-year ground lease for the property.

The property, which once was home to an oil terminal, is situated within an M3-1 manufacturing district, which also permits industrial and retail use.

Two buildings and a parking deck now sitting on the property are vacant and can be cleared for redevelopment, JLL said, estimating the waterfront property to contain 870,000 SF of buildable space.

Noting the site’s proximity to a nexus of highways in Brooklyn, including the Belt Parkway, I-95 and I-278, JLL touted the property in a release as “an ideal site for a manufacturing, distribution or last-mile logistics facility.”

The industrial market in NYC is one of the tightest in the nation, with virtually no vacancies and few available sites that are suitable for new construction of large warehouses.

The location of the property with a Qualified Opportunity Zone allows prospective tenants to both defer and substantially reduce their capital gains tax liability; the site also is eligible for an ICAP tax abatement, a program that directly reduces the percentage of taxes paid for a period of 15-25 years.

“The property benefits from a wide array of potential as-is uses, including industrial, parking, storage and retail,” said Michael Mazzara, a managing director of JLL Capital Markets who is part of the team overseeing the sale of the ground lease.

“With a lack of inventory of this scale, 1776 Shore Parkway is well positioned as a flagship location for one or multiple tenants,” Mazzara added.

JLL did not indicate whether the site’s previous use as an oil depot had resulted in a brownfield designation for any part of the property.

JLL’s release on the ground lease availability noted the tightness of the industrial markets in the outer boroughs of NYC.

“Limited availability has driven developer and institutional activity to new heights over the past 12 months,” JLL said. “Although construction activity is the highest it has been in years, with over 3.4M SF currently under construction, 54.8% of that product is already preleased. With an average tenant requirement size of 148K SF, tenants are finding it difficult to find functional space.”
Reprinted with permission from the Fri, 13 May 2022 06:47:16 EDT online edition of GlobeSt © 2022 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited, contact 877-256-2472 or reprints@alm.com.