Bed Stuy hotel project in bankruptcy sells for $13.2M

UPDATED 2:40 p.m., September 27, 2023: Lazar Waldman, through the entity 1325 Atlantic Ave Owner LLC, paid $13.2 million to Steven Green through the entity 1325 Atlantic Realty LLC for the mid-construction hotel building (H3) at 1325 Atlantic Avenue and an adjacent property in Bedford Stuyvesant, Brooklyn. Bankruptcy court records disclosed that Lazar Waldman, the property’s lessee, bought the building out of bankruptcy.

On these lots, there is one active major alteration construction project for a 151-unit, 44,425 square-foot hotel (R-1) building. The project was submitted by Lazar Kleinberger with plans filed January 2, 2018 and permitted August 26, 2020.
The deal closed on September 7, 2023 and was recorded on September 18, 2023. The two properties have 50,678 square feet of built space and 7,449 square feet of additional air rights according to a PincusCo analysis of city data. The sale price per built square foot is $260 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 Steven Green was Steven Green. The signatory for the buyer entity in care of the law firm Jeffrey Zwick & Associates was Jeffrey Zwick. The contract date was May 17, 2023. The property was sold through a bankruptcy 1-22-40277-nhl filed by Esther Green, who along with Steven Green own the property that was leased to Lazar Waldman. Greg Corbin of Northgate Real Estate Group, at the time with Rosewood Realty Group, was marketing the property.

Because multiple properties have been transacted, some of the following sections will follow the property with the largest assessed value, which in this case, is the property on 1325 Atlantic Avenue.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the anonymous entities registered with Jeffrey Zwick & Associates purchased three properties in three transactions for a total of $49.7 million and has no record they sold any properties over the past 24 months.
The seller Steven Green had not purchased any other properties and sold one property in one transaction for a total of $2.5 million over the same time period.

The property

The hotel building in Bedford Stuyvesant has 50,678 square feet of built space and 7,449 square feet of additional air rights according to a PincusCo analysis of city data. The parcel has frontage of 119 feet and is 125 feet deep with a total lot size of 13,057 square feet. The lot is irregular. The zoning is M1-1 which allows for up to 1 times floor area ratio (FAR) for manufacturing The city-designated market value for the property in 2022 is $8.3 million. The most recent loan totaled $6.4 million and was provided by Sands Capital on January 27, 2021.

Violations and lawsuits

The properties were involved in one lawsuit and one bankruptcy over the past two years. The suit was a $2.9 million commercial foreclosure concerning a lease filed on September 23, 2021, by Steven Green and Esther Green-Blumenfeld against Lazar Waldman. In addition, according to city public data, the properties have received five DOB violations and $300 in OATH penalties in the last year.

The neighborhood

In Bedford Stuyvesant, The bulk, or 35 percent of the 54.7 million square feet of commercial built space are elevator buildings, with walkup buildings next occupying 29 percent of the space. In sales, Bedford Stuyvesant has 2.9 times the average sales volume among other neighborhoods with $1.1 billion in sales volume in the last two years and is the 4th highest in Brooklyn. For development, Bedford Stuyvesant has 3.5 times the average amount of major developments relative to other neighborhoods and is the 5th highest in Brooklyn. It had 3.5 million square feet of commercial and multi-family construction under development in the last two years, which represents 6 percent of the neighborhood’s built space.

The block

On the tax block of 1325 Atlantic Avenue, PincusCo has identified the owners of six of the 10 commercial properties representing 318,931 square feet of the 388,315 square feet. The largest owner is St. Nicks Alliance, followed by Phoenix Realty Group and then NYC Department Of Education.
There are no active new building construction projects on this tax block.

The majority, or 47 percent of the 388,315 square feet of built space are elevator buildings, with industrial buildings next occupying 18 percent of the space.

The seller

The PincusCo database currently indicates that Steven Green owned at least one commercial property with 32 residential units in New York City with 36,300 square feet and a city-determined market value of $2.8 million. (Market value is typically about 50% of actual value.) The portfolio consists of at least a single elevator property. It is located in Bronx.

Updated: Lazar Waldman was identified as the buyer, as disclosed in bankruptcy court records.

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