Abraham Grunhut pays $36.3M to Read Property, Chetrit Group for 51-unit rental in Williamsburg

Abraham Grunhut through the entity Keap Manor LLC paid $36.3 million to Read Property Group and the Chetrit Group through the entity 487 Keap LLC for the midblock 51-unit residential elevator building at 487 Keap Street in Williamsburg, Brooklyn.
The deal closed on June 2, 2022 and was recorded on June 16, 2022. The property has 56,997 square feet of built space according to PincusCo analysis of city data. The sale price per built square foot is $636 per the PincusCo analysis. (The price per square foot analysis is the transaction price divided by square feet as reported in public records and assumes no air rights have been sold.)
The signatory for Read Property Group and Chetrit Group was Robert Wolf. The signatory for Abraham Grunhut was Abraham Grunhut. This building is a conversion from a former commercial loft building.

Abraham Grunhut financed the acquisition through a loan with lender KeyBank valued at $28 million, or a 77 percent loan to value.

Prior sales and revenue

Prior to this transaction, PincusCo has no record that the buyer Abraham Grunhut had purchased any other properties and sold one property in one transaction for a total of $2.1 million over the past 24 months.
The seller Read Property Group had not purchased any other properties and had not sold any properties over the same time period. The former owners according to the Department of Housing Preservation and Development includes Robert Wolf, head officer and Jacob Bernat, agent. The business entities are Plaza Management Usa and 487 Keap Llc.

The property

The 487 Keap Street parcel has frontage of 127 feet and is 161 feet deep with a total lot size of 16,703 square feet. The lot is irregular. The zoning is M1-2/R6 which allows for up to 2 times floor area ratio (FAR) for manufacturing and up to 2.43 times FAR for residential. The property has a 421A exemption that started in 2015 and expires in 2030. The city-designated market value for the property in 2022 is $12.1 million. The most recent loan totaled $18.5 million and was provided by Signature Bank on March 25, 2021.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the property since September of 2020. In addition, according to city public data, the property has received two housing violations and $100 in OATH penalties in the last year.

Development

For the tax lot building, it received its initial certificate of occupancy on April 10, 2013. There are no active new building construction projects or major alteration projects with initial costs more than $5 million on this tax lot.

The neighborhood

In Williamsburg, the bulk, or 35 percent of the 65.1 million square feet of commercial built space are residential elevator buildings, with residential walkup buildings next occupying 19 percent of the space. In sales, Williamsburg has the 9th highest sale turnover among other neighborhoods in the city with $1.4 billion in sales volume in the last two years. For development, Williamsburg is the 6th most active neighborhood among other neighborhoods. It had 5.1 million square feet of commercial and multi-family construction under development in the last two years, which represents 8 percent of the neighborhood’s built space. There were three pre-foreclosure suit filed among other residential elevator buildings in the past 12 months.

The block

On this tax block, PincusCo has identified the owners of five of the 14 commercial properties representing 183,543 square feet of the 382,797 square feet. The largest owner is Chetrit Group, followed by Shuxin Liang and then Mordechai Jacobowitz. There are no active new building construction projects on this tax block.

The majority, or 74 percent of the 197,324 square feet of built space are residential elevator buildings, with hotel buildings next occupying 10 percent of the space.

The seller

The PincusCo database currently indicates that Chetrit Group owned at least 31 commercial properties with 3,652,908 square feet and a city-determined market value of $680.2 million. (Market value is typically about 50% of actual value.) The portfolio has $1.6 billion in debt, with top three lenders as Bank of Montreal, Starwood Mortgage Capital, and Starwood Capital Group respectively. Within the portfolio, the bulk, or 34 percent of the 3,652,908 square feet of built space are office properties, with elevator properties next occupying 27 percent of the space. The bulk, or 60 percent of the built space, is in Manhattan, with Queens next at 33 percent of the space.
The PincusCo database currently indicates that Read Property Group owned at least one commercial property with 56,997 square feet and a city-determined market value of $12.1 million. (Market value is typically about 50% of actual value.) The portfolio has $18.5 million in debt, borrowed from Signature Bank. The portfolio consists of at least a single elevator property. It is located in Brooklyn.

The buyer

The PincusCo database currently indicates that Abraham Grunhut owned at least 45 commercial properties with 294,712 square feet and a city-determined market value of $46.9 million. (Market value is typically about 50% of actual value.) The portfolio has $62.4 million in debt, with top three lenders as Signature Bank, Goldman Sachs, and Greystone & Co. respectively. Within the portfolio, the bulk, or 79 percent of the 294,712 square feet of built space are walkup properties, with mixed-use properties next occupying 10 percent of the space. The bulk, or 86 percent of the built space, is in Brooklyn, with Bronx next at 12 percent of the space.

Surrounding

Within a 400-foot radius of 487 Keap Street, PincusCo identified six commercial real estate items of interests occurred over the past 24 months.
Of those six items, one was for major renovation including a certificate of occupancy change. It was a permit issued on September 17, 2020 for the $3.3 million renovation of 20,100-square-foot hotel (R-1) building with nine residential units at 39 Ainslie St.
Of those six items, five were loans above $5 million totaling $63.8 million. The most recent of the five was 421 Union Avenue LLC which borrowed $16 million from Amalgamated Bank secured by the 33,848-square-foot, 29-unit rental (D1) on 421 Union Avenue on May 10, 2022.

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