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Madison Realty’s new $78 million deal in Jamaica

The buildings, located at 184-10 and 184-60 Jamaica Ave., total about 613,000 square feet.

A keen eye for investment

In order to keep up with the demand for warehouse spaces that exists in the city, Madison Realty Capital has made a new deal. The company bought a $78 million space in Jamaica. This trend was made apparent by e-commerce companies, that are in great need of storage space. Furthermore, Madison associated with a partner in order to co-invest in this transaction. The co-investor, in this case, was Artemis Real Estate. This company took a stake in the buildings, but the amount was undisclosed. The properties will be operated by Madison Realty, and the neighboring industrial buildings span more than 610,000 square feet.


The property is based at 184-10 and 184-60 Jamaica Avenue, and is currently about 80% leased. This information was provided by Josh Zegen, Madison Realty co-founder. The mortgage for the purchase was provided by KKR, an investment firm. Zegen also confirmed the theories. His company was attracted to the buildings because the need e-commerce companies have for storage space. According to his calculations, more than 10 million square feet of industrial space was taken up and used for different purposes, such as hotels and offices in the last 10 years. This is another reason why the demand is so high nowadays. Furthermore, the land is too expensive to build from the ground up a storage space. The demand is higher than it ever was and the supply is very limited, so this is a very smart move for Madison Realty.

Co-investors and partners

As far as Artemis goes, they entered the deal later in the year. Madison Realty started the negotiations on its own at the beginning of 2017 and then made a deal with Artemis. This company shares Zegen’s views and they both are very confident that the rents in the property will only go up. There is a widespread opinion that says rental markets are stalled when it comes to office and residential space, Zegen has explained. Nevertheless, this has not yet happened to industrial space, where rents can potentially continue to rise, partly because of the high demand and partly because of the lack of supply. According to Zegen’s calculations, rents can go up as much as 15% in the next few years.

The partnership of Madison with Artemis was arranged by a team of brokers from Cushman & Wakefield, whereas Pinnacle Realty was in charge of brokering the sale itself. First of all, the new owners will make sure the vacant space is filled and then they will work on openings as current leases expire in the next couple of years. As of right now, the partnership of Madison and Artemis is seeking a rental rate in the mid to high teens per square foot.

Some extra info

The two sites are adjacent. This allows users who desire more space in a single level to rent as much as they need. The buildings were built back in 1923 and 1954, and like similar vintage properties, they feature very high ceilings. In some floors, they reach 17 feet. These properties have served many purposes throughout their history. For example, they used to be a manufacturing space for the Rubik’s Cube. Nowadays, one of the most important tenants the property has it Gotham Greens. This company has a large greenhouse on the roof of one of the buildings. There, they grow produce for local supermarkets and they even provide for Whole Foods. [Crain’s]