$11.9M pre-foreclosure at one-time Emerald Equity rentals

The trustee for securitized loan bondholders filed a pre-foreclosure action yesterday in U.S. District Court in Manhattan, alleging a loan secured by the rental buildings at 741 Hunts Point Avenue in Hunts Point and 801 Freeman Avenue in Morrisania, the Bronx, with an original principal of $11.87 million, was in default. Sabal Capital originated the loan in 2019 with borrower Emerald Equity Group.

The two buildings have a total of 66 residential units and four commercial units.

Emerald Equity Group, led by Isaac Kassirer, is no longer invested in the rent-regulated space, according to a person familiar with the company.

The trustee is seeking the appointment of a rent receiver, according to the filing, 1:23-cv-10796.

According to an affidavit pdf submitted seeking the receiver, “Based on the most recent rent roll data available to Plaintiff lender, the total aggregate rent roll across the two properties is approximately $100,000 per month. Despite their continued collection of such rents, however, Defendant borrowers have not made a monthly debt service payment (approximately $42,230 per month) to the lender in any of the past eight (8) months.”

Violations and lawsuits

According to city public data, the property has received five DOB violations, $500 in ECB penalties, 34 housing violations, and $7,175 in OATH penalties in the last year.

There were no lawsuits or bankruptcies filed against the property for the past 24 months.

The neighborhood

In Hunts Point, The majority, or 59 percent of the 14.4 million square feet of commercial built space are industrial buildings, with specialty buildings next occupying 15 percent of the space. In sales, Hunts Point has near average sales volume among other neighborhoods with $129.6 million in sales volume in the last two years and is the 10th highest in Bronx. For development, Hunts Point has near average amount of major developments among other neighborhoods and is the 15th highest in Bronx. It had 589,695 square feet of commercial and multi-family construction under development in the last two years, which represents 4 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of 21 of the 42 commercial properties representing 984,870 square feet of the 1,309,198 square feet. The largest owner is Banana Kelly Community Improvement Association, followed by Chestnut Holdings Of New York and then City Of New York. There are no active new building construction projects on this tax block.

The owner

The PincusCo database indicates that Emerald Equity Group once owned at least 79 commercial properties with 2,150 residential units in New York City with 1,630,907 square feet and a city-determined market value of $234.9 million. (Market value is typically about 50% of actual value.) The portfolio has $70 million in debt, with top three lenders as Sabal Capital Partners, Sabal Capital Group, and Cedarbridge Management respectively. Within the portfolio, the bulk, or 68 percent of the 1,630,907 square feet of built space are walkup properties, with elevator properties next occupying 32 percent of the space. The bulk, or 72 percent of the built space, is in Manhattan, with Bronx next at 28 percent of the space.

The owner according to the Department of Housing Preservation and Development is Ariel Nunez, head officer. The business entity is Bronx 741-743 Hunts Point Ave Lp.

The surrounding

Within a 400-foot radius of 743 Hunts Point Avenue, PincusCo identified one commercial real estate item of interests occurred over the past 24 months. It was a loan which MHANY Management borrowed $19.3 million from NYC Department of Housing Preservation and Development secured by the 97,804-square-foot, 109-unit rental (D7) on SPOFFORD Avenue on October 18, 2022.

Direct link to the property’s ACRIS page and link to DOB NOW portal.