Bentley Zhao’s New Empire Corp. pays $18M for likely dev site in Flatbush

Bentley Zhao’s New Empire Corp. through the entity Nere Flatbush Management LLC paid $18 million to Steven Neuman through the entity 21 Lenox LLC for the industrial building (G2) at 21 Lenox Road in Flatbush, Brooklyn, retail building (K1) at 765 Flatbush Avenue in Flatbush, Brooklyn, and retail building (K1) at 757 Flatbush Avenue in Flatbush, Brooklyn.
The deal closed on October 24, 2022 and was recorded on November 3, 2022. The five properties have 21,861 square feet of built space and 86,264 square feet of additional air rights for a total buildable of 108,052 square feet according to PincusCo analysis of city data. The sale price per built square foot is $823 and the price per buildable square foot is $166 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 Neuman was Steven Neuman. The signatory for New Empire Corp. was Bentley Shang Zhao. Steven Neuman is affiliated with Coltown Properties.
New Empire Corp. through the entity Nere Flatbush Management LLC as borrower signed a acquisition loan with lender Columbia Capital through the entity Columbia Capital II Inc. valued at $10 million.

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 765 Flatbush Avenue.

Prior sales and revenue

Prior to this transaction, Pincusco has records that the buyer New Empire Corp. purchased nine properties in five transactions for a total of $62.7 million and sold one property in one transaction for a total of $3.1 million over the past 24 months.
The seller Steven Neuman had not purchased any other properties and had not sold any properties over the same time period.

The property

The 765 Flatbush Avenue parcel has frontage of 42 feet and is 125 feet deep with a total lot size of 5,411 square feet. The lot is irregular. 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 $787,000.

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 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 Flatbush, the majority, or 55 percent of the 37.9 million square feet of commercial built space are elevator buildings, with walkup buildings next occupying 21 percent of the space. In sales, Flatbush has near average sales volume among other neighborhoods with $349.3 million in sales volume in the last two years and is the 18th highest in Brooklyn. For development, Flatbush has near average amount of major developments among other neighborhoods and is the 18th highest in Brooklyn. It had 1 million square feet of commercial and multi-family construction under development in the last two years, which represents 3 percent of the neighborhood’s built space.

The block

On the tax block of 765 Flatbush Avenue, PincusCo has identified the owners of seven of the 32 commercial properties representing 338,697 square feet of the 666,508 square feet. The largest owner is Bluejay Management, followed by Barry Hers and then Goldmont Realty.
On the tax block, there were two new building construction projects totaling 59,763 square feet. The largest is a 43-unit, 32,956-square-foot R-2 building developed by Marc Jacobowitz with plans filed March 30, 2020 and permitted January 28, 2022. The second largest is a 37-unit, 26,807-square-foot R-2 building developed by Ofer Prager with plans filed January 25, 2016 and it has not been permitted yet.

The majority, or 73 percent of the 666,508 square feet of built space are elevator buildings, with walkup buildings next occupying 14 percent of the space.

The seller

The PincusCo database currently indicates that Steven Neuman owned at least five commercial properties in New York City with 130,128 square feet and a city-determined market value of $18.7 million. (Market value is typically about 50% of actual value.) The portfolio has $25.4 million in debt, borrowed from New York Community Bank. Within the portfolio, the bulk, or 55 percent of the 130,128 square feet of built space are elevator properties, with walkup properties next occupying 30 percent of the space. The bulk, or 55 percent of the built space, is in Bronx, with Manhattan next at 42 percent of the space.

The buyer

The PincusCo database currently indicates that New Empire Corp. owned at least 12 commercial properties in New York City with 311,489 square feet and a city-determined market value of $58.7 million. (Market value is typically about 50% of actual value.) The portfolio has $303.7 million in debt, with top three lenders as Fortress Investment Group, Popular Bank, and Axos Bank respectively. Within the portfolio, the bulk, or 91 percent of the 311,489 square feet of built space are elevator properties, with specialty properties next occupying 5 percent of the space. The bulk, or 57 percent of the built space, is in Brooklyn, with Queens next at 38 percent of the space.

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