Midwood’s Kingswood Center just traded hands for what looks like a bargain price, with the three-story shopping complex on Kings Highway selling this week for $31 million. Michael Berfield’s Bridges Development Group is listed as the buyer, and ownership is moving over from PNC Bank’s Midland Loan Services. That sale figure is a steep markdown from the roughly $88.8 million the property fetched in early 2020.
Deal details
Brokerage JLL handled the sale and also lined up the acquisition loan. A JLL debt team arranged about $34.65 million in acquisition financing, according to Commercial Observer. JLL brokers Ethan Stanton, Michael Mazzara and Brendan Maddigan represented Midland Loan Services and negotiated directly with Bridges Development Group. Representatives for both Bridges and PNC stayed quiet and did not immediately respond to requests for comment.
Why the price plunged
Urban Edge Properties bought Kingswood Center as part of a larger portfolio in 2020 and later fell behind on a roughly $66 million CMBS loan. That delinquency pushed the lender toward foreclosure and special servicing, The Real Deal reported. At the same time, the property was bleeding tenants, with occupancy and net operating income sliding hard.
Reporting at the time put occupancy in the mid-30s percent range and annual NOI near $1.9 million, a tough combo for a big-box retail center. Remaining tenants included T.J. Maxx and a small medical clinic, according to contemporaneous coverage, leaving much of the building dark and dragging down the property’s value.
Property basics
The center sits at 1630 East 15th Street and is listed in city property records at roughly 229,926 square feet on a 48,000-square-foot lot. Offering materials and a confidentiality agreement filed by JLL identify the owner as COMM 2018-COR3 1630 East 15th St LLC and show that the property was marketed with substantial vacancy and leasing opportunities. The confidentiality agreement is included in the JLL materials, and public property records show the most recent transfers and assessments for the site.
What comes next
Bridges Development Group has signaled a value-add strategy, planning to invest in the complex and fill the empty storefronts, with the new financing expected to support that effort, according to Commercial Observer. The sale was also reported by Crain's New York Business, which first flagged the transaction.
For Midwood neighbors, a successful re-tenanting push could mean new services, brighter storefronts and more local jobs. For nearby retailers, it will be a real-world test of how much demand is left in an outer-borough retail market that is still trying to find its post-pandemic footing.
