$7M bankruptcy at Sunset Park dev site where 34 units planned
5118-5124 4th Avenue (Credit - Cyclomedia)
The owner of a two-parcel, corner development site in Sunset Park, Brooklyn, at 5118 to 5124 4th Avenue, filed a chapter 11 petition to place the property into bankruptcy, valuing the asset at $7 million and claiming liabilities of $5.7 million owed to the lender.
The individual Hui Zhen Kuang, as vice president of 5120 Realty Corp., filed the bankruptcy petition in U.S. Bankruptcy Court in Brooklyn.
The site is composed on two buildings, a three-story mixed-use building and a one-story retail building. Tian Lu of 5120 Realty Corp. filed plans in 2019 for a 34-unti building under job number 321387851.
The full ownership of the property is not clear from the property records. Real estate investor Hui Zhen Kuang, signing as president of 5120 Realty Corp., bought the property in 2017 for $5.5 million. Then in 2020, the entity 5120 Realty Corp., by the signature of Wing Fung Chau, also signing as president, borrowed $3.5 million from Howard Wasserman’s BP3 Capital LLC. Wing Fung Chau has been involved as a respondent in at least 20 commercial property litigation cases in New York City, several of them foreclosure cases, since late 2020, according to an analysis by PincusCo of court filings.
Wing Fung Chau signed a contract to sell the site for an undisclosed amount, according to a memorandum of contract recorded in 2021.
Case 1-24-41259-ess LINK
Chapter 11 petition LINK
The retail building in Sunset Park has 2,000 square feet of built space and 17,996 square feet of additional air rights for a total buildable of 19,996 square feet according to a PincusCo analysis of city data. The parcel has frontage of 50 feet and is 100 feet deep with a total lot size of 4,999 square feet. The zoning is R7A which allows for up to 4 times floor area ratio (FAR) for residential with inclusionary housing. The city-designated market value for the property in 2022 is $427,000.
There is a $3.5 million loan. An owner filed to demolish the building in 2020, but the plan was not carried out. The bankruptcy petition claims the property is worth $7 million and it has a judgment lien of $5.7 million held by BP3 Capital LLC (written in the petition as BO3 Capital LLC). Hui Zhen Kuang’s petition makes negative allegations against Wing Fung Chau and the lender in the petition.
Prior sales and revenue
The 2,000-square-foot property generated revenue of $73,024 or $37 per square foot, according to the most recent income and expense figures.
Violations and lawsuits
According to city public data, the property has not received any significant violations in the last year.
There were no lawsuits or bankruptcies filed against the property for the past 24 months.
The neighborhood
In Sunset Park, The bulk, or 30 percent of the 34 million square feet of commercial built space are industrial buildings, with specialty buildings next occupying 24 percent of the space. In sales, Sunset Park has near average sales volume among other neighborhoods with $399.5 million in sales volume in the last two years and is the 19th highest in Brooklyn. For development, Sunset Park has near average amount of major developments among other neighborhoods and is the 46th highest in Brooklyn. It had 10,477 square feet of commercial and multi-family construction under development in the last two years, which represents 0.03 percent of the neighborhood’s built space. There was one pre-foreclosure suit filed among other development buildings in the past 12 months.
The block
On this tax block, PincusCo has identified the owners of two of the seven commercial properties representing 4,643 square feet of the 42,220 square feet. The identified owner is Xiao Qiang Li. On the tax block, there were two new building construction projects totaling 80,863 square feet. The largest is a 50-unit, 54,932 square-foot residential (R-2) building submitted by Jay Marcus with plans filed August 8, 2017 and permitted April 8, 2019. The second largest is a 34-unit, 25,931 square-foot residential (R-2) building submitted by Tian Lu with plans filed April 22, 2019 and it has not been permitted yet.
The owner
The PincusCo database currently indicates that Xiao Qiang Li owned at least two commercial properties with two residential units in New York City with 4,643 square feet and a city-determined market value of $757,000. (Market value is typically about 50% of actual value.) Within the portfolio, the bulk, or 57 percent of the 4,643 square feet of built space are mixed-use properties, with retail properties next occupying 43 percent of the space. They are all located in Brooklyn.
The surrounding
Within a 400-foot radius of 5120 4 Avenue, PincusCo identified one commercial real estate item of interests occurred over the past 24 months. It was a permit issued on September 29, 2022 for the $2.6 million renovation of 17,019-square-foot business (B) building with N/A residential units at 5216 4th Avenue.
Direct link to the property’s ACRIS page and link to DOB NOW portal.