FedEx buys part of Sunset Industrial Park in New York City for nearly $250 million

International shipping company FedEx Corp. has bought part of Sunset Industrial Park in Brooklyn for $248 million, according to New York City records. The company plans to operate a 246,000-square-foot distribution center on the site.

Part of Sunset Industrial Park, a 1.8 million-square-foot development at 50 21st St. in Brooklyn's Sunset Park neighborhood, was acquired by the Memphis, Tennessee-based international shipping company, records show. FedEx had previously operated a storage site there.

"The new building will replace a smaller one in the same industrial park and will optimize service capabilities of the FedEx network," FedEx said in a statement. "The site was chosen because of its proximity to the current facility and to customers' distribution centers, as well as established team members.”

An affiliate company of Bridge Development, a New York City-based industrial real estate developer, had previously owned the property for more than five years. Development plans for Sunset Industrial Park were revealed in 2018 when a partnership between Bridge Development and DH Properties acquired this parcel for about $214 million. Adjusted for inflation, that deal is valued at about $261 million.

Schematics from Hunter Roberts Construction Group show a new, glassy industrial structure taking over the 700,000-square-foot lot and replacing its aged buildings. The development originally had an estimated completion date of 2022 but hasn't yet concluded. Demolition and equipment permits were filed for a one-story structure on-site in May 2020 and were subsequently approved in May 2022. No vacancy advertisements for the site could be found at the time of publication.

"The new facility will have about 175 employees to start, and we will add to the workforce as necessary to meet growing demand for our services," FedEx said.

FedEx's acquisition comes as Cushman & Wakefield's Q4 2023 industrial real estate report shows asking rents have increased to record highs of $28.20 per square foot. At the same time, industrial vacancy has increased throughout New York City's outer boroughs.

“The New York outer boroughs’ industrial sector had a strong year," said Dimitri Mastrogiannis, senior research analyst at Cushman & Wakefield. "We saw a substantial increase in direct average asking rents and several Class A new construction deliveries, which is a positive sign for the market, as it shows the continued growth and demand for quality industrial space in New York City."

For now, records show that Bridge Development and DH Properties are holding on to some of the parcels surrounding 75 20th St., including several buildings that it had previously acquired in 2019 for $40.8 million.

Bridge did not return requests for comment at the time of publication.