340 Court Street

Brooklyn, NY
43 Units · Fund I · Sold 2012

Opportunity

Through an off market process, The Davis Companies recapitalized a stalled for-sale residential development project in the Carroll Gardens neighborhood of Brooklyn at 50% of the prior ownership’s investment basis. The Davis Companies structured an equity joint venture with the original investor and a strong local developer.

Overview

The project was originally started in 2006, however, the development stalled after the project was designed and permitted, tax abatements procured, the foundation poured, structural steel purchased, and $40 million had been invested. This area of Carroll Gardens had seen little new development but with one of the best school districts in NYC and excellent transportation options into Manhattan, it was highly desirable to working families. The Davis Companies’ business plan was to complete the construction of the project and market the units for sale.

Value Creation Strategy

The Davis Companies was able to recapitalize this coveted development project at an attractive basis through an off-market process. After providing the majority of the new equity, The Davis Companies gained control of the venture. In order to accommodate families, the luxury units were larger in size and the project included 67 parking spaces, a fitness center, a children’s playroom, and storage. The site also included just under 10,000 RSF of ground floor retail. The 32 condo units, 11 townhomes, and two retail units sold out in August 2014, well ahead of original underwriting.