Gazit Horizons Invests $63M in NYC and Boston

NEW YORK CITY—Gazit-Globe through its subsidiary Gazit Horizons has entered a joint venture obtaining a leasehold interest in Ceasar’s Bay Bazaar, a 300,000 square-foot shopping center on 14 acres along the waterfront in Brooklyn, NY. Gazit acquired a 41% economic interest and 50% voting interest in the property. Additional specifics regarding the financing were not disclosed. But sources close to the transaction say Gazit Horizons paid approximately $40 million in purchasing an interest in an existing partnership, with Surrey Equities and multiple limited partners.

The Ceasar’s mall (named after a developer not the Roman emperor) is anchored by Kohl’s, Best Buy and Modell’s Sporting Goods. Toys R Us is scheduled to vacate later this year.

Gazit Horizons also acquired property at 467 Washington St. and 43 Winter St. in the Downtown Crossing district of Boston.

“Our acquisitions in Brooklyn and Boston this past week, at a total combined investment of over $63 million are consistent with our strategy of finding urban, irreplaceable retail real estate in our target markets,” says Jeff Mooallem, Gazit Horizons’ CEO. “Having a local presence in both markets enabled us to secure these opportunities, and we expect them to be strong financial performers for our portfolio in the near future.”

He tells GlobeSt.com that the mall with its size and location along the waterfront was a unique combination. “In New York City, you do not have surface parked, large-scale retail assets like this. They are typically in the suburbs,” says Mooallem. He explains in the past his company would go anywhere for strong retail but the trend now is real estate product-oriented and tenant-focused considering optionality of the underlying asset.

For example, in referencing Gazit Horizons’ Upper East Side retail condominium located on First Avenue at 401 E. 60th St., he says “It does not have to be retail to be a solid, cash flowing asset for us.” According to Real Capital Analytics, in October 2017, Gazit Horizons bought the 92,000 square-foot building for $73.3 million from the Brodsky Organization. Constructed in 1999, the 38-floor structure was fully occupied at the time of the sale, including retail tenants Starbucks and Bed, Bath & Beyond.

Since Mooallem’s interview with GlobeSt.com in May 2017, when Gazit Horizons launched in New York, the company has continued to grow. It has opened its New York office at 70 E. 55th St. Mooallem and the firm’s chairman Chiam Katzman are based in Miami but work out of both New York and Florida. The firm is now focusing on acquiring assets in New York, Miami and Boston, continuing its plans to invest $2 billion, in a three to five-year timeframe which began with its arrival in New York. “We are still looking for opportunities in gateway markets to deploy capital in long-term investments. But we’re patient. What we want doesn’t grow on trees, and we’ll wait for the right opportunities,” he says.