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Sprawling UPS Distribution Hubs Coming to Red Hook and Maspeth, Report Says

By Amy Zimmer | November 1, 2017 4:29pm
 One of the warehouse buildings that UPS is reportedly leasing in Red Hook.
One of the warehouse buildings that UPS is reportedly leasing in Red Hook.
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DNAInfo/Amy Langfield

NEW YORK CITY — While all eyes are on Amazon’s expanding footprint in New York, UPS has signed long-term leases for sites in Red Hook and Maspeth that total 1.7 million square feet, The Real Deal reported.

The delivery company's new site in Red Hook replaces ambitious plans of Italian developer Est4te Four for a $400 million, 1.1 million square-foot office complex.

The New Jersey-based company Sitex Group, which specializes in buying industrial real estate and renting out space to big-box stores and e-tailers, bought the waterfront property — at 219 Sullivan St., 68 and 100 Ferris Sts., and 202 and 242 Coffey Sts. — in May for $110 million.

The warehouses total 350,000 square feet, but 1.2 million square feet can be built on the property, according to The Real Deal, which put asking rents at $25 per square foot.

Sitex confirmed the deal, but declined to comment on its details.

The 475,000-square-foot warehouse at 50-02 55th Ave. in Maspeth, which had been a Duane Reade distribution center until May, reportedly asked $20 per square foot.

The owner of the warehouse, Solil Management, did not immediately return a request for comment, while UPS declined to comment. 

The move comes on the heels of Amazon's plans to curb deliveries by UPS and other vendors, according to Bloomberg News. The tech behemoth is planning its own $100 million, 855,000-square-foot warehouse on Staten Island, joining the company's smaller same-day delivery hubs on West 34th Street in Manhattan and in Sunset Park's Liberty View Industrial Plaza.

As these big companies jockey for space within city limits to help solve their “last-mile” problem of getting goods to people’s homes quickly, New York's industrial pockets are being recolonized by warehouses, pushing up rents in these manufacturing zones, experts say.

“Traditional retail is having a tough time, and there’s a lot of talk about retail vacancies,” said Jonathan Eshaghian, of commercial real estate brokerage firm Marcus & Millichap, which was not involved in either deal.

"Industrial, so to speak, is becoming the new retail. Rather than going to a shop directly, especially when it comes to apparel and electronics, people are getting it online. The companies need warehouse spaces and places to store what they’re shipping.”