Apollo, Witkoff sign $388.4M construction loan with Bank of America for 592-unit development in Downtown Brooklyn

Apollo Global Management and Witkoff through the entity Brook NY Residential LLC as borrower signed a new construction loan with lender Bank of America valued at $388.4 million for the development at 589 Fulton Street in Downtown Brooklyn, Brooklyn.
The deal closed on August 3, 2022 and was recorded on September 8, 2022. The prior lender was Apollo Global Management which held debt that had an original loan amount of $143.3 million.
The signatory for Apollo Global Management and Witkoff was Jeffrey Horowitz. The signatory for Bank of America was Jenny Han.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the properties since September of 2020. In addition, according to city public data, the properties have received $10,000 in ECB penalties and $10,000 in OATH penalties in the last year.

Development

On these lots, there is one active new building construction project for a 592-unit, 597,824-square-foot R-2 building. The project was developed by Craig Murphy with plans filed August 27, 2021 and it has not been permitted yet.

The neighborhood

In Downtown Brooklyn, the bulk, or 40 percent of the 24.3 million square feet of commercial built space are office buildings, with elevator buildings next occupying 25 percent of the space. In sales, Downtown Brooklyn has 3.2 times the average sales volume among other neighborhoods with $1.1 billion in sales volume in the last two years and is the 3rd highest in Brooklyn. For development, Downtown Brooklyn has 3.4 times the average amount of major developments relative to other neighborhoods and is the 5th highest in Brooklyn. It had 3.6 million square feet of commercial and multi-family construction under development in the last two years, which represents 15 percent of the neighborhood’s built space.

The block

On the tax block PincusCo has identified the owners of 23 of the 29 commercial properties representing 1,217,395 square feet of the 2,432,228 square feet. The largest owner is Brodsky Organization, followed by RedSky Capital and then Acadia Realty Trust.
There are five active new building construction projects totaling 3,767,437 square feet. The largest is a 483-unit, 1,584,889-square-foot R-2 building developed by Extell Development with plans filed December 15, 2015 and permitted November 3, 2017.

The majority, or 88 percent of the 755,830 square feet of built space are elevator buildings, with mixed-use buildings next occupying 12 percent of the space.

The borrower

The PincusCo database currently indicates that Apollo Global Management owned at least three commercial properties in New York City with 1,396,625 square feet and a city-determined market value of $59.8 million. (Market value is typically about 50% of actual value.) Within the portfolio, the bulk, or 100 percent of the 1,396,625 square feet of built space are elevator properties, with development properties next occupying 0 percent of the space. They are all located in Manhattan.

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