The prime Williamsburg site once eyed for a residential conversion by Isaac Hager and Yitzchak Tessler has now traded to a lender.
Cornell Realty Management and Tessler Developments sold the property at 206 Kent Avenue to G4 Capital Partners for $65 million, Crain’s reported. Acore Capital Management provided $52.5 million in acquisition financing for the deal.
The five-story, full-block site was co-developed by the two partners in 2020. Tessler appears to be out, but Hager is set to retain a small stake in the property. Neither responded to a request for comment from the outlet.
Cornell acquired the property for $33 million in 2016. Cornell landed a $64 million construction loan from Madison Realty Capital in 2017.
In 2020 — weeks before the pandemic — G4 lent $84.3 million in financing to the Williamsburg Wharf developers. But within three years, ownership allegedly defaulted on the debt, leading to a foreclosure threat from G4. A year later, it even moved to sell the property through a private auction, which doesn’t appear to have come to fruition.
The 110,000-square-foot development is anchored by Trader Joe’s, which has operated a 29,000-square-foot store since 2021. The grocery store allegedly withheld rent for years over construction delays, leading to an ownership-driven lawsuit in 2023 to recover the missed payments. That lawsuit was ultimately discontinued.
The property is 60 percent leased, including to a Tessler office that will relocate next month. Trader Joe’s doesn’t appear set to go anywhere, but the future of the rest of the office-and-retail property is less clear.
In the fall, ownership filed plans to rezone the site, which would allow for an expansion to 14 stories and the creation of 143 housing units in place of the office space. A public hearing was held on the rezoning last week and G4 intends to keep going with the rezoning effort.
New York-based G4 recently sold a 10-story, 30,000-square-foot office building at 74 Eighth Avenue in the West Village to San Francisco-based Spear Street Capital for $50.5 million.
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