Arizona-based lender Avana Capital filed a pre-foreclosure action alleging an $18.8 million loan it provided in July 2022 to Joel Schwartz and secured by a hotel building at 101 Bogart Street, in East Williamsburg, Brooklyn was in default.
The property is a six-story, 65-unit extended stay hotel building that also has the addresses 360 Johnson Street and 351 Boerum Street.
Joel Schwartz is one of the city’s most-active mid-sized developers.
According to the complaint, “The Loan matured as due and owing in full on August 1, 2023. Borrower did not pay the Loan in full on August 1, 2023. Borrower’s failure to pay the Loan in full on August 1, 2023 was an Event of Default as provided in the Loan Documents.”
Court records represent the position on one party and are not necessarily accurate or complete. Schwartz did not immediately respond to a request for comment.
The hotel building in East Williamsburg has 24,624 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 75 feet and is 96 feet deep with a total lot size of 7,470 square feet. The lot is irregular. The zoning is M1-2 which allows for up to 2 times floor area ratio (FAR) for manufacturing The city-designated market value for the property in 2022 is $6.6 million. The most recent loan totaled $18.8 million and was provided by Avana Capital on July 29, 2022.
Prior sales and revenue
The 24,624-square-foot property generated revenue of $2.2 million or $88 per square foot, according to the most recent income and expense figures.
Sam Polatsek of Bedford Park Management LLC submitted a new building construction project for a 65-unit, 22,542 square-foot hotel/dormitory/shelter (R-1) building at 101 Bogart Street. The plan was filed on December 31, 2012 and was permitted on July 31, 2015. It calls for the construction of a 92-foot tall, seven-story building and was filed with the New York City Department of Buildings under job number 320589421. The project is described in the filing as: proposing 7 story and cellar hotel building.
For the tax lot building, it received its initial certificate of occupancy on April 10, 2020.
Violations and lawsuits
According to city public data, the property has not received any significant violations in the last year.
In East Williamsburg, The majority, or 62 percent of the 17 million square feet of commercial built space are industrial buildings, with walkup buildings next occupying 11 percent of the space. In sales, East Williamsburg has near average sales volume among other neighborhoods with $430.7 million in sales volume in the last two years and is the 18th highest in Brooklyn. For development, East Williamsburg has near average amount of major developments among other neighborhoods and is the 20th highest in Brooklyn. It had 844,678 square feet of commercial and multi-family construction under development in the last two years, which represents 5 percent of the neighborhood’s built space.
On this tax block, PincusCo has identified the owners of one of the three commercial properties representing 24,624 square feet of the 70,251 square feet. The identified owner is Joel Schwartz. There are no active new building construction projects on this tax block.
The PincusCo database currently indicates that Joel Schwartz owned at least 79 commercial properties with 980 residential units in New York City with 923,606 square feet and a city-determined market value of $165.7 million. (Market value is typically about 50% of actual value.) The portfolio has $864.5 million in debt, with top three lenders as BridgeCity Capital, Citibank, and Popular Bank respectively. Within the portfolio, the bulk, or 52 percent of the 923,606 square feet of built space are elevator properties, with walkup properties next occupying 19 percent of the space. They are all located in Brooklyn.
This is the first commercial real estate event of interest identified within the 400-foot radius of 351 Boerum Street in the past 24 months.