Listen to this articleA five-property Long Island industrial portfolio has traded for $95.8 million.
The sellers, Metropolitan Realty Associates (MRA), in partnership with TPG Angelo Gordon, had acquired the properties in a two-and-a-half-year period for slightly over $77 million.
The buyer, Manhattan-based private equity firm Investcorp, adds the MRA portfolio to its 43 million square feet of industrial properties across 620 buildings, part of the firm’s $10.8 billion real estate assets.
MRA, led by founder and CEO Joe Farkas, raised $50 million of equity with TPG Angelo Gordon in 2021 that was focused on acquiring industrial properties on Long Island. The buying spree that followed assembled a portfolio totaling 435,000 square feet on over 33 acres in Bay Shore, Ronkonkoma and Bayport.
The first acquisition in the portfolio was a 94,500-square-foot building on 6.2 acres at 5 Inez Drive in Bay Shore that MRA purchased for $14 million in Aug. 2021. The property is leased to fulfilment company Ruby Has.
In March 2022, MRA acquired the 128,000-square-foot building on 5.6 acres at 81 Spence St. in Bay Shore for $22.25 million. Duro Dyne, a manufacturer and global distributor of sheet metal accessories and equipment products for the HVAC industry, extended its lease for the property through May 2035.
MRA purchased two Ronkonkoma properties for $28.3 million in Nov. 2022, including the 102,000-square-foot building on 8.7 acres at 195 13th Ave. and the 33,000-square-foot building on 1.75 acres at 2175 5th Ave. Unitta Exotique Woods Corp., which does business as Lumber Plus, signed a 10-year lease for 2175 5th Ave. in January. The property at 195 13th Ave., which had been leased to tire supplier Max Finkelstein Inc., is now vacant.
In February, MRA closed on its $12.6 million acquisition of a 75,000-square-foot cold storage and distribution center at 33 Rajon Road in Bayport. The former home of global baking giant Europastry USA, the building was leased to a contract bakery firm Bakery Process Solutions in March.
“The success of this transaction highlights the strength of our shared vision for long-term value creation,” Farkas said. “Four of the buildings are 100 percent leased to single-tenant occupants, while the building at 195 13th Avenue in Ronkonkoma was recently vacated and is slated for redevelopment after successfully obtaining site plan approval. The redevelopment plans include a new parking lot with sought-after overnight truck and van parking, enhancing the property’s appeal and functionality.”
The MRA portfolio sale comes at a time of continued demand for Long Island industrial space, though there’s been millions of square feet of newly built warehouses and distribution facilities that have come online in the last couple of years. The overall vacancy rate for Long Island industrial property ticked up to 4.8 percent in the second quarter of the year, with average asking rents at $18.62 per square foot, according to a report from JLL.
“These strategic dispositions follow the successful execution of our plan to acquire and reposition high-quality industrial assets in the Long Island market,” said Doug Profenius, vice president at TPG Angelo Gordon.
Founded in San Francisco in 1992, TPG is a global asset management firm with $229 billion under management.
MRA, established by commercial real estate veteran Farkas in 2001, is an integrated, private real estate investment and development company specializing in core, core-plus, and opportunistic investments in the New York metropolitan area. Farkas was named Top Industrial Redeveloper by LIBN’s Real Estate, Architecture and Engineering Awards in 2023.
Gary Gabriel, Kyle Schmitt, Ryan Larkin, Bill Baunack, Seth Zuidema and Tom DeLuca of Cushman & Wakefield procured the buyer and represented MRA and TPG Angelo Gordon in the portfolio sale transaction.