$65.5M pre-foreclosure filed at Urban Edge Properties Sheepshead Bay retail, office

The trustee for a $65.5 million CMBS loan filed a pre-foreclosure action against an affiliate of Urban Edge Properties seeking the sale of the retail and office building Kingswood Center at 1630 East 15th Street in Sheepshead Bay, Brooklyn, which Urban Edge Properties bought in February 2020 for $88 million.
The lender, a CMBS loan owned by bondholders of COMM 2018-COR3, in care of trustee Wells Fargo, and Midland Loan Services, alleges the borrower did not make the May 6, 2023, payment and declared the loan in default by notice May 12, 2023.

Court filings represent the position of one party and are not necessarily accurate or complete.

The retail and office building in Sheepshead Bay has 229,926 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 126 feet and is 200 feet deep with a total lot size of 47,999 square feet. The lot is irregular. The zoning is C4-4A which allows for up to 4 times floor area ratio (FAR) for commercial and up to 4 times FAR for residential with inclusionary housing. The city-designated market value for the property in 2022 is $35.5 million.

Urban Edge Properties in 2020 bought the mixed-use building from Nightingale Properties and Steven Kassin and Ike S. Franco’s Infinity Real Estate, now known as The Real Co. The purchase contract was dated October 28, 2019.

Urban Edge Properties bought Kingswood Center in conjunction with the purchase of Kingswood Crossing at 1715 East 13th Street for $76 million, but that property has no debt and is not part of this action.

Urban Edge Properties is a spinoff of Vornado Realty Trust, with the formation of the separate company completed in 2015.

The neighborhood

In Sheepshead Bay, The bulk, or 43 percent of the 26.5 million square feet of commercial built space are elevator buildings, with specialty buildings next occupying 17 percent of the space. In sales, Sheepshead Bay has near average sales volume among other neighborhoods with $486.2 million in sales volume in the last two years and is the 14th highest in Brooklyn. For development, Sheepshead Bay has near average amount of major developments among other neighborhoods and is the 21st highest in Brooklyn. It had 695,967 square feet of commercial and multi-family construction under development in the last two years, which represents 3 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of three of the 13 commercial properties representing 238,868 square feet of the 313,085 square feet. The largest owner is Bennett A. Medoff, followed by Bldg Management and then Urban Edge Properties. On the tax block, there was one new building construction project filed totaling 15,992 square feet. It is a 16-unit, 15,992 square-foot residential (R-2) building submitted by Chiu Wong with plans filed August 7, 2017 and permitted January 23, 2023.

The owner

The PincusCo database currently indicates that Urban Edge Properties owned at least two commercial properties in New York City with 344,359 square feet and a city-determined market value of $51.4 million. (Market value is typically about 50% of actual value.) Within the portfolio, the bulk, or 67 percent of the 344,359 square feet of built space are office properties, with mixed-use properties next occupying 33 percent of the space. They are all located in Brooklyn.

The surrounding

Within a 400-foot radius of 1621 East 14 Street, PincusCo identified one commercial real estate item of interests occurred over the past 24 months. It was a new building permit application filed on March 15, 2022 for a 15,636-square-foot residential (R-2) building with 19 residential units at 1652 East 14th Street.

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