Housing Project at Landmark Sears Site in Flatbush Nails Loan

A multifamily project at the former site of a landmarked Sears store in Flatbush has landed $95M in construction financing.

Clipper Equity announced it secured the financing for a 226-unit development at 2359 Bedford Avenue, with 30% of the apartments designated as affordable units, from Bank Hapoalim and its U.S. division, BHI..

The 148K SF development, which will include 23K SF of commercial space and 10K SF of retail space, is part of a four-building project that will stretch across three city blocks around the historic site at the corner of Bedford Avenue and Beverly Road.

Two years ago, the property was acquired from Transform Operating Stores, which purchased Sears assets after the retail chain went bankrupt.

Earlier this year, Clipper secured loans from Slate Property Group, which provided $140M in construction financing for a 354-unit building at 2366 Bedford Avenue, and Valley National Bank, which provided $105M in construction financing for a 226-unit project at 2201 Beverly Road, Pincus Co. reported.

The iconic Sears store in Flatbush closed in 2021 after 89 years, dating back to 1932, when Eleanor Roosevelt addressed a crowd at the grand opening. The art deco tower was designated as a city landmark in 2012.

As of April, there were only 11 Sears stores remaining in the U.S., including an outlet in Puerto Rico. Four of the stores are in California.

Sears, which was once the largest retailer in the U.S., last fall sold its 2.4M headquarters campus in the Chicago suburb of Hoffman Estates to Compass Datacenters for $194M. Compass said it would build a data center for cloud computing at the 197-acre site, located at 3333 Beverly Road in Hoffman Estates.

Sears, Roebuck & Co., which opened its first store in Chicago in 1893, at its zenith became the top retailer in the US with more than 4,000 stores and 350,000 employees. Selling clothing, appliances and everything in between, the chain was the bricks-and-mortar version of Amazon long before Amazon existed.

When the real Amazon showed up and began spreading its online tentacles across the retail universe, the downfall of Sears commenced. When the department store and auto service center chain filed for bankruptcy in 2018, Sears was a shadow of its former self, with about 700 stores.