NEW YORK CITY—Another development site with large space potential has changed hands, this time in the popular Williamsburg section of Brooklyn. Also of note, the property appears to have traded at a discount.

Blesso Properties, a West Village-based development firm, has purchased 525-545 Broadway, a development site in East Williamsburg, for $33 million. The transaction equates to nearly $170 per buildable square foot, in a market that is trading in the $250 to $300 square foot buildable range. 

ATCO Properties & Management, a Manhattan-based owner/operator of Class A commercial real estate, provided $12.7 million of preferred equity to fund the acquisition. Title insurance & real estate investment consultant Michael Atkins arranged the preferred equity while Cooper-Horowitz' Mark Niman, senior director-capital markets group, arranged a senior mortgage loan.

The property, located on the northeast corner of Boerum Street and Broadway, includes 190,000 square feet of buildable square feet. It is comprised of a 60,000 square-foot office building— formerly known as the Lincoln Savings Bank—as well as a 13,000 square-foot parking lot. The site is located on the same block as the Lorimer Street J/M subway station and one block from the Broadway stop on the G train.

Blesso plans to redevelop the existing office building and construct a mixed-use tower on the vacant parking lot, according to David Kessler, president. “We plan to seamlessly integrate well-curated office, retail, community facility, and co-working spaces at the property.” The residential portion will include approximately100 rental units, as well as roughly 22,000 square feet of indoor and outdoor amenities.

“Creative and technology office tenants are getting priced out of areas like Midtown South and Dumbo,” he adds, “making areas like East Williamsburg a viable, convenient, and more affordable alternative.  As millennials continue to move to Williamsburg and Bushwick, their employers will follow, desiring to move their operations closer to their employee base.”

ATCO's investment, meanwhile, is the first transaction made by the ATCO City Center Real Estate Mezzanine Loan Program, an investment vehicle designed to provide financing to CBD commercial properties in select markets across the country. The preferred equity ATCO provided will serve as additional financing to a nearly $22 million senior mortgage loan that the sponsor secured from Centennial Bank.