Pacific Urban Buys Williamsburg Rental Building for $83M

Pacific Urban Investors has snapped up another Williamsburg rental building as it continues to beef up its East Coast multifamily portfolio.

The Palo Alto-based firm bought The Garnett at 146 South Fourth Street from Simon Dushinsky’s Rabsky Group for $82.5 million, The Real Deal has learned. Rabsky developed the 113-unit rent-stabilized building in 2013 under 421a.

The fully-leased building’s tax exemption is set to expire next year, which means the new owner can raise the rents to market rate after the current tenants move out. The Garnett has the kind of amenities that draw millennials to the popular Brooklyn neighborhood, like a lounge, fitness center and rooftop with East River views.

“Investment economics have improved remarkably over the past few years in the city and demand characteristics have remained extremely favorable resulting in compelling yields and high occupancies,” said John Fluke, managing director of investments, in a statement. “Additionally, changes to New York’s 421(a) program should result in some incremental headwinds to new supply, further bolstering the operating fundamentals of existing assets, and adding to that durability of income.”

Rabsky did not immediately respond to requests for comment. Meridian Capital Group’s Lipa Lieberman, who represented both sides in the deal, declined to comment.

The deal marks Pacific Urban’s eighth purchase in the New York metro market and at least its second in Williamsburg. Matt Lederer, vice president of investments, said earlier this year that the neighborhood has been “a submarket of focus” for the multifamily investor due to “its proximity to Manhattan, vibrant entertainment and lifestyle amenities, and various transportation options.”

In January, Pacific Urban bought the multifamily building at 395 Leonard Street for $127.5 million, the borough’s second-largest transaction by dollar volume during the first half of the year.

Sales of Brooklyn multifamily properties have performed well so far this year, increasing 28 percent in dollar volume and 10 percent in transaction volume from the first half of 2024, according to commercial brokerage TerraCRG.

“A handful of these properties that we’re seeing in the top five are sort of newish construction, old 421A programs,” TerraCRG CEO Dan Marks said in a conference call earlier this month. “There’s a large appetite for buyers in the market today.”