In its first move as a publicly traded company, Clipper Realty is buying an 11-story Brooklyn Heights rental building from the Jehovah’s Witnesses for $87.5 million, the firm told The Real Deal.
The David Bistricer-led real estate investment trust entered into an agreement to buy 107 Columbia Heights for $569 per square foot. The Witnesses put the 154,000-square-foot building on the market in April. At the time, sources speculated it could fetch up to $1,000 per foot.
Clipper said it expects to close on the property by May 2017, and it plans to convert several public spaces in the building into 12 additional apartments.
The REIT debuted on the New York Stock Exchange on Feb. 10, looking to raise $68.1 million through the sale of its common stock, which was initially priced at $13.50 per share.
Bistricer said the REIT would focus on “strategic, value-add” investments, he told TRD in 2015. Since then, Clipper has raised $130.2 million in a private offering, according to its prospectus.
Clipper’s portfolio is comprised of more than 3,500 residential units in Brooklyn and Manhattan, including Flatbush Gardens, a 59-building rent-controlled apartment complex, and 50 Murray Street and 53 Park Place in Tribeca. It also owns two mixed-use buildings at 141 and 150 Livingston Street. In January, Clipper paid $103 million for a 232-unit rental building at 1955 First Avenue.
Excluding the Aspen, the properties generated rental revenue of $80 million in 2016, according to Clipper’s prospectus. In addition to acquisition, Clipper intends to pump $31 million into upgrades of existing properties to drive “substantial rent growth,” the REIT said in a regulatory filing.
The Witnesses have been exiting Brooklyn in a series of deals over recent months. In April, Kushner Companies, Aby Rosen’s RFR Realty and LIVWRK paid over $700 million for their 733,000-square-foot global headquarters at 25-30 Columbia Heights and a development site at 85 Jay Street in Dumbo.
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