Bidding wars for 366-368-370 Gates Ave. development site in Bed-Stuy
Eye On Real Estate
How hot is demand for Bedford-Stuyvesant development sites?
So hot that there was a bidding war for a fire-damaged property — even though its tenants were living in shelters and the purchaser would have to find them new homes.
Tower Real Estate Investments, doing business as Tower REI, was the winner of this bidding war for 368 and 370 Gates Ave.
“There were at least seven offers. We negotiated for a good six months,” company principal Rafael Reihanian told the Brooklyn Eagle.
He and his brother and business partner Michael Reihanian run the 10-year-old real estate firm based in Great Neck, L.I., which has been active in Brooklyn and Manhattan since its inception.
Tower REI is now building a 16-unit, four-story condo project at 366-368-370 Gates Ave.
The Reihanians bought 368 and 370 Gates Ave. through an LLC from George Sales for $1.2 million in February 2015, city Finance Department records indicate.
There were two attached houses at these addresses. A city Buildings Department permit issued for repair work indicates the fire, which damaged both houses, took place some time before Dec. 4, 2012.
Five tenants from the two houses were living in shelters, Rafael Reihanian said. As the new owners of the properties, the Reihanians were responsible for relocating them in new homes.
“There was a risk of not finding the tenants,” he said.
The developer was able to locate the displaced residents — and hired a rental agent to find them new places to live. Tower REI covered their moving expenses and paid their rents for a couple months, he said.
Also, the city charges landlords for the time their tenants spend in shelters when their properties are uninhabitable. Tower REI paid a hefty shelter bill, Rafael Reihanian said.
And there were numerous liens on 368 and 370 Gates Ave. prior to its sale, which Tower REI had to pay.
‘Very optimistic about the neighborhood’
The exterior walls of the condo development have been constructed at 368 and 370 Gates Ave. Construction will start soon at 366 Gates Ave. The Reihanians bought this lot through an LLC for $1.1 million from James Harris in January 2016, Finance Department records indicate.
There was a bidding war for 366 Gates Ave., too.
Rafael Reihanian said he was willing to raise his offering price for this third lot.
“It made sense for us to outbid the competition since we were already developing next door,” he said.
Also, he was willing to pay more than he’d originally planned for 366 Gates Ave. because he thinks there’s plenty of unmet demand for condos in Bed-Stuy.
“From an investment point of view, we feel very optimistic about the neighborhood,” Reihanian said.
In addition to young entrepreneurs coming from Park Slope, Cobble Hill and Manhattan to look for condos in Bed-Stuy, young families with children are also seeking condos in the neighborhood.
As a family-friendly feature, the condos at 366-368-370 Gates Ave. will be especially large in terms of square footage.
A two-bedroom duplex will be 1,367 square feet in size. Two-bedroom simplex condos will each be 986 square feet. One-bedroom condos will each be about 700 square feet in size.
He expects construction to be completed by the end of this year at 368 and 370 Gates Ave., and to have a temporary certificate of occupancy for 366 Gates Ave. by early 2017.
A few details about Tower REI: This family-owned company has been active in Bed-Stuy for a decade.
Its previous projects in the neighborhood include luxury condos on Throop Avenue and rental apartments on Hancock Street.
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