It took just a few seconds for the clerk opening the fourth and last bid envelopes for the sale of the soon-to-be-surplus Cioni building on Crown Street in the heart of Kingston’s Stockade neighborhood last Friday afternoon. The offer in the envelope signified a new high-water mark in the accelerating boom in the prices of the neighborhood’s commercial real estate.
BRE Properties of 177 Christopher Street in the West Village of Manhattan, representing 61 Crown Street, LLC, bid $4,253,000 for the 22,680-square-foot brick structure on an acre and a quarter owned by Kingston’s school district. The offer was almost exactly the same as the cost of the school district moving its administrative offices to the Meagher School and making other changes there.
Who bought the Cioni building? The bid on behalf of BRE was signed by manager Neil Bender. Bender is also principal of William Gottlieb Real Estate, one of the largest development companies in Manhattan. Bender is a recent buyer of Dutchess County properties who maintains a home in Red Hook. According to the bid document signed by him, BRE-affiliated Dutchess assets include the 170-acre Heermann farm, Foster’s Coach House, the Rhinecliff Hotel and “several other properties located in downtown Rhinebeck.”
The buyer intends to pursue a hotel-spa concept at the Cioni building. Plans show retention of the central atrium as a community event space on the first floor, an elevator, 14 hotel rooms on the second floor, a vantage point on the flat roof, and restrooms and administrative space in the basement.
According to the bid document, additional amenities will be provided at 317 Wall Street, the long-vacant former uptown Yallum’s store bought by 317 Wall Street, LLC in 2015. The facility will connect to the fabric of the neighborhood. Amenities in that renovated building may include a pool, exercise room, racquetball courts and other gym facilities.
The BRE bid was more than double that of the nearest competitor, Ironstate Holdings LLC of Hoboken, New Jersey, a substantial development company with major projects on both sides of the Hudson River. Ironstate, the runner-up bidder at $1.8 million and an option for $2 million, has been developing several projects in partnership with SK Development and CB Developers. The principal of CB is Charles Blaichman, who owns a weekend home in Woodstock and eight commercial properties in Kingston, including six recent ones in or near the Stockade area.
Veteran local broker Nan Potter, who represents both Blaichman and Ironstate, said last Friday that Ironstate or its affiliates own some real estate, mostly commercial, in Dutchess County and to a lesser degree in Kingston.
There were two other unsuccessful bidders. Kerry Danenberg, a Brooklyn condo developer who recently bought the former West Hurley Elementary School, bid $1.3 million. Chestnut Hill Advisory Partners, a consulting firm headed by Adrianna Kertzer, represented Grupo Habita, the Mexican boutique hotelier that had drawn headlines with a million-dollar preemptive bid on the Cioni building early last year. Chestnut Hill bid $1.2 million.
The deal, if consummated, would expand the involvement in Stockade commercial real estate of BRE and its affiliates.
The interest in Kingston of at least three substantial New York metro-area developers — BRE Properties, CB Developers and Ironstate Holdings — could attract kindred spirits. All three city-area developers have diversified holdings. They could be pitched to provide further capital for other mid-Hudson real-estate purchases. In for a dime, in for a dollar.
If I were advising BRE’s client about the possibility of a boutique hotel at the Cioni building, for example, I would recommend their buying the Hoffman House, the wonderful historic restaurant contiguous to the Cioni structure. Betcha that the asking price of the Hoffman House went up by at least $100,000 the moment the content of the envelope from BRE Properties was read aloud last Friday afternoon.
As we all know, there’s been a lot of speculation recently about Kingston becoming the new Brooklyn. A surge of moneyed millennials, the story goes, are flooding into the small city, buying properties left and right, driving up real-estate prices and squeezing out locals with more limited financial resources.
Basically, that’s not happening, at least not yet. Though selling prices for residential properties have been increasing at the county or more local level on a year-to-year basis, they’ve been doing so in the middle single digits — 6.2 percent in Ulster County in May, 5.5 percent in Dutchess. Kingston’s numbers have been in line with the county ones.
What has been happening in selected places like Kingston’s Stockade district, however, has been a strong upward surge in prices for commercial properties. At first, the buyers were local people, across-the-river merchants and investment groups attracted by returns not as much from the rent rolls but from potential property appreciation. More recently, there’s been investment by immensely deep-pocketed developers from the New York real-estate world with second homes or family ties in the mid-Hudson area.
Years ago, urban developers swarmed to Beacon, and a few years after that to Hudson. Now it may be Kingston’s turn. In places like Kingston’s Stockade district, the game appears to be on.