Affordable developer Monadnock pays $5.7M for industrial in Gowanus

The affordable developer Monadnock Development through the entity Third Street Owner LLC paid $5.7 million to Philip J. Scafuri through the entity Scafuri & Son 142 LLC for midblock industrial building at 142 2nd Street in Gowanus, Brooklyn.
The deal closed on March 9, 2022 and was recorded on March 21, 2022. The property has 4,000 square feet of built space and 10,212 square feet of additional air rights for a total buildable of 14,184 square feet according to PincusCo analysis of city data. The sale price per built square foot is $1,425 and the price per buildable square foot is $401 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 Philip J. Scafuri was Philip J. Scafuri. The signatory for Monadnock Development was Nicholas Lembo. Nicholas Lembo is managing member of Monadnock Development.

Prior sales and revenue

Prior to this transaction, Pincusco has records that the buyer Monadnock Development purchased 38 properties in one transactions for a total of $79.3 million and has no record it sold any properties over the past 24 months.
The seller Philip J. Scafuri had not purchased any other properties and had not sold any properties over the same time period. The 4,000-square-foot property generated revenue of $64,614 or $16 per square foot, according to the most recent income and expense figures.

The property

The 142 2nd Street parcel has frontage of 70 feet and is 100 feet deep with a total lot size of 7,092 square feet. The zoning is M2-1 which allows for up to 2 times floor area ratio (FAR) for manufacturing. The city-designated market value for the property in 2022 is $286,000.

Violations and lawsuits

The property was not involved in any lawsuits or bankruptcies in the past years. In addition, according to city public data, the property has not received any significant violations in the last year.

Development

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 Gowanus, the bulk, or 38 percent of the 11.5 million square feet of commercial built space are industrial buildings, with 1-4 family buildings next occupying 17 percent of the space. In sales, Gowanus has had very little sales volume relative to other neighborhoods with $205.4 million in sales volume in the last two years. For development, Gowanus is the 10th most active neighborhood among other neighborhoods. It had 4.1 million square feet of commercial and multi-family construction under development in the last two years, which represents 35 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of two of the 10 commercial properties representing 20,100 square feet of the 58,433 square feet. The two identified owners are Monadnock Development and Ido Paul Amit. There are three active new building construction projects totaling 437,900 square feet. The largest is a 301-unit, 316,634-square-foot R-2 building developed by Frank Dubinsky with plans filed December 8, 2021 and it has not been permitted yet. The second largest is a 29-unit, 32,063-square-foot R-2 building developed by Andrew Bradfield with plans filed November 15, 2021 and it has not been permitted yet.

The majority, or 48 percent of the 65,513 square feet of built space are industrial buildings, with office buildings next occupying 32 percent of the space.

The buyer

The PincusCo database currently indicates that Monadnock Development owned at least 45 commercial properties with 1,248,770 square feet and a city-determined market value of $189.6 million. (Market value is typically about 50% of actual value.) The portfolio has $500.9 million in debt, with top three lenders as New York City Housing Authority, NYC Housing Development Corporation, and Wells Fargo respectively. Within the portfolio, the bulk, or 60 percent of the 1,248,770 square feet of built space are residential elevator properties, with residential walkup properties next occupying 34 percent of the space. The bulk, or 94 percent of the built space, is in Manhattan, with Bronx next at 5 percent of the space.

Surrounding

Within a 400-foot radius of 142 2nd Street, Pincusco identified six commercial real estate items of interests occurred over the past 24 months.
Of those six items, three were in new building development. There were three new building permit applications. The most recent of these three items was a filing on December 8, 2021 for a 265,987-square-foot R-2 building with 301 residential units at 155 3rd Street.
One of those six items was a sale which Ido Paul Amit bought the 1,600-square-foot, one-unit industrial (F5) on 132 2nd Street for $21.6 million from Property Markets Group on March 11, 2022.
Of those six items, two were loans above $5 million totaling $21 million. The most recent of the two was Ido Paul Amit which borrowed $16 million from Maxim Capital Group secured by the 1,600-square-foot, one-unit industrial (F5) on 132 2nd Street on March 11, 2022.

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