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Brooklyn, NY: The (Condo) Vulture Has Landed

Jamestown Properties, a German-backed investment firm located in Atlanta, purchased a mostly completed luxury high-rise condominium in downtown Brooklyn, New York, for an undisclosed sum. The 246-unit condo, named be@Schermerhorn, located at 189 Schermerhorn Street, was the fourth branded condominium project from SDS Procida Development Group, headed by Louis Greco and Mario Procida. SDS will continue to manage the property.

Construction at the high-rise apartment complex in downtown Brooklyn has resumed. Perhaps surprisingly, Jamestown Properties said that he development will remain a condominium.

Be@Schermerhorn is the latest development in the downtown Brooklyn area to go through a workout. A few months ago, 30-story luxury condo Forte was taken over by its lender Eurhypo Bank. Jamesport, which was already an equity investor in be@Schermerhorn, said it bought the mortgage at a deep discount, but declined to disclose specifics. A syndicate of four banks led by Wachovia Bank provided the $100 million loan for the project at 189 Schermerhorn St. SDS Procida, the developer of the property located, remains a partner.

The sale makes sense in this market. Keeping the units as condos (in anything but name only, until the next cycle) may not be so prudent. About 1,500 luxury condo units are on the market in downtown Brooklyn alone, as rentals.

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