$28M pre-foreclosure filed at Lightstone Management’s 69-unit East Flatbush rental

An affiliate of Greystone & Co. filed a $28 million pre-foreclosure action at Berel Farkas-led Lightstone Management‘s 200 Linden Boulevard, a 69-unit elevator apartment building in East Flatbush, Brooklyn. The lender filed the complaint on August 21, 2024, in New York State Supreme Court in Brooklyn, alleging a maturity default, among other allegations.

Court filings represent the position of one party and are not necessarily accurate or complete. Lightstone Management is not affiliated with David Lichtenstein’s Lightstone Group.

The lending market has generally made financing more expensive and difficult for borrowers.

Case 522577/2024 LINK

According to the complaint, “The original Maturity Date of the Loan was February 1, 2023. On January 31, 2023, Borrower and Lender executed the First Amendment extending the Maturity Date of the Loan to August 1, 2023… On or about July 31, 2023, Borrower and Lender agreed to extend the Maturity Date of the Loan to February 1, 2024… Borrower and Lender executed the Third Amendment extending the Maturity Date of the Loan to June 1, 2024…Borrower failed to repay the Loan principal upon the Maturity Date. On and after June 1, 2024, Borrower also failed to make required monthly interest payments on the outstanding principal of the Loan.”

Lightstone Management submitted a new building construction project for a 69-unit, 50,260 square-foot residential (R-2) building at 204 Linden Boulevard in East Flatbush, Brooklyn. The plan was filed with the New York City Department of Buildings on February 3, 2015 under job number 321081306 and was permitted on June 12, 2015. It calls for the construction of a eight-story building. The project is described in the filing as: proposed 8 story and cellar residential/community facility building total of 69 dwelling units.

Development

Lightstone Management submitted a new building construction project for a 69-unit, 50,260 square-foot residential (R-2) building at 204 Linden Boulevard. The plan was filed on February 3, 2015 and was permitted on June 12, 2015. It calls for the construction of a 80-foot tall, eight-story building and was filed with the New York City Department of Buildings under job number 321081306. The project is described in the filing as: proposed 8 story and cellar residential/community facility building total of 69 dwelling units.

The property

The elevator building with 69 residential units in East Flatbush has 71,448 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 91 feet and is 140 feet deep with a total lot size of 12,404 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 $13.6 million. The most recent loan totaled $28 million and was provided by Greystone & Co. on January 4, 2021.

Prior sales and revenue

This property was sold for $2.1 million on February 4, 2015.

The 71,448-square-foot property generated revenue of $2 million or $28 per square foot, according to the most recent income and expense figures.

For the tax lot building, it received its initial certificate of occupancy on December 31, 2019.

Violations and lawsuits

According to city public data, the property has received five housing violations, $230 in OATH penalties, and one housing litigation in the last year.

There were no lawsuits or bankruptcies filed against the property for the past 24 months prior to this pre-foreclosure action.

The neighborhood

In East Flatbush, The bulk, or 32 percent of the 42.6 million square feet of commercial built space are elevator buildings, with walkup buildings next occupying 24 percent of the space. In sales, East Flatbush has near average sales volume among other neighborhoods with $383 million in sales volume in the last two years and is the 18th highest in Brooklyn. For development, East Flatbush has near average amount of major developments among other neighborhoods and is the 9th highest in Brooklyn. It had 1.7 million 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 12 of the 25 commercial properties representing 283,400 square feet of the 457,945 square feet. The largest owner is Abram Silver, followed by Ari Worch and then City of New York. There are no active new building construction projects on this tax block.

The owner

The PincusCo database currently indicates that Lightstone Management owned at least three commercial properties with 117 residential units in New York City with 116,886 square feet and a city-determined market value of $20.8 million. (Market value is typically about 50% of actual value.) The portfolio has $73.9 million in debt, with top three lenders as Greystone & Co., Ladder Capital, and ORIX Real Estate respectively. Within the portfolio, the bulk, or 93 percent of the 116,886 square feet of built space are elevator properties, with walkup properties next occupying 7 percent of the space. They are all located in Brooklyn.

The owners according to the Department of Housing Preservation and Development includes Berel Farkas, head officer and Aaron Gross, site manager. The business entities are Anm Management Llc and Linden Courtyard Llc.

The surrounding

This is the first commercial real estate event of interest identified within the 400-foot radius of 200 Linden Boulevard in the past 24 months.

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