$14.95M bankruptcy filed for 3 rent-stabilized rentals in Bronx

A restructuring professional filed four bankruptcies in Islip, Long Island, in U.S. Bankruptcy Court for the Eastern District, seeking to coordinate a sale of three primarily mixed-use rent-stabilized residential properties in the Bronx, that have a total of $14.95 million in original debt, held by Valley National Bank. The bank has filed pre-foreclosure actions at each property.

The filing says the bankruptcy was initiated in coordination with a “restructuring support agreement”, or RSA, with Valley National Bank.

According to the filings, “The RSA shall provide the blueprint for these Chapter 11 cases and contemplates a coordinated sale process with VNB based upon a minimum total bid of at least $8,350,000.”

The four filings are being consolidated under one action. David Goldwasser, of FIA Capital Partners, filed the petitions as chief restructuring officer. The loan signatory is Kourosh Nasab of Roslyn Heights, Long Island, but the petition identifies additional members of the four ownership entities.

The owners acquired the properties in 2017. They are the 58-unit 2734 Sedgwick Avenue in Kingsbridge with a rent roll of $67,968; the 61-unit 918 Faile Street in Hunts Point with a rent roll of $40,375; and the 31-unit 938 Intervale Avenue in Longwood with a rent roll of $40,085. Oritani Finance Company originated the loans, but it was acquired by Valley National Bank in 2019.
According to an affidavit Goldwasser submitted related to the bankruptcies, “These changes [in the rent laws in 2019], combined with the fallout from the pandemic, have dramatically eroded the values of the Properties, which are worth less than half of their original acquisition prices. Besides mortgage financing, the principals of the Debtors have made multi-million dollar capital contributions to buy and maintain the Properties.”
The petitions seek to sell the properties through the bankruptcy process.
The affidavit says, “The parties are in agreement that Greg Corbin of Northgate Real Estate Group shall be retained as the broker in these cases.”

The properties

The walkup building at 2734 Sedgwick Avenue with 58 residential units in Kingsbridge Heights has 49,920 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 104 feet and is 137 feet deep with a total lot size of 12,150 square feet. The lot is irregular. The zoning is R6 which allows for up to 2.43 times floor area ratio (FAR) for residential. The property has a J-51 exemption that started in 1992 and expires in 2026. The city-designated market value for the property in 2022 is $2.8 million. This property was sold for $9.4 million on December 28, 2017.
Direct link to the property’s ACRIS page

The walkup building at 918 Faile Street with 59 residential units in Hunts Point has 57,840 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 114 feet and is 103 feet deep with a total lot size of 13,115 square feet. The lot is irregular. The zoning is R6 which allows for up to 2.43 times floor area ratio (FAR) for residential. The city-designated market value for the property in 2022 is $3.2 million. This property was sold for $8.7 million on October 19, 2016.
Direct link to the property’s ACRIS page

The walkup building at 938 Intervale Avenue with 27 residential units in Longwood has 29,700 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 75 feet and is 100 feet deep with a total lot size of 7,500 square feet. The zoning is R7-1 which allows for up to 3.44 times floor area ratio (FAR) for residential. The city-designated market value for the property in 2022 is $1 million. This property was sold for $6.2 million on October 19, 2016.
Direct link to the property’s ACRIS page