Brooklyn Tabernacle plans $40M refi with first-time lender in NYC, Cass Commercial

The Brooklyn Tabernacle church seeks to refinance an existing $43 million loan from Investors Bank provided in 2019 with a $40 million loan from Cass Commercial Bank, a Missouri-based lender that focuses on providing financing to religious organizations and nonprofits.
The Brooklyn Tabernacle is a non-denominational megachurch that holds services several times a week in a large theater at 17 Smith Street and it also owns a commercial condominium unit at 180 Livingston Street.
This would be the first loan Cass has given in New York City since at least the 1970s, according to a PincusCo review of city records. Cass did not immediately respond to a request for comment.
According to a court filing made December 6 in Brooklyn State Supreme Court as part of a process nonprofits take when making substantial financing changes,”The refinancing of this existing debt is necessary because the Current Mortgage is maturing, and its variable interest rate is becoming financially burdensome.
“The Current Mortgage has an interest rate of LIBOR plus 225 basis points, which as of November 3, 2022, is 6.09% (pursuant to the monthly interest rate notice form the holder of the Current Mortgage). The Current Mortgage requires monthly interest-only payments and does not allow for a reduction in principal without a prepayment penalty. The initial maturity date has passed, and the Petitioner has negotiated an extension to avoid default while it pursues refinancing.”
The terms of the loan are, a “Principal Amount of up to $40,000,000 to refinance existing debt (the Petitioner will pay off the remaining Principal of Current Mortgage with its own equity); Amortizing term of 10 years (with an amortization schedule not to exceed 25 years); and An interest rate of 4.95% for the first 5 years; for years 6-10 the interest rate would reset at the 5-year Treasury yield at that time plus 2.0%, fixed for 5 years (with a minimum interest rate of 4.0%)”
LINK

The property

The 17 Smith Street property in Downtown Brooklyn has 130,000 square feet of built space and 158,249 square feet of additional air rights for a total buildable of 288,250 square feet according to a PincusCo analysis of city data. The parcel has frontage of 57 feet and is 200 feet deep with a total lot size of 28,825 square feet. The lot is irregular. The zoning is C5-4 which allows for up to 10 times floor area ratio (FAR) for commercial and up to 10 times FAR for residential with inclusionary housing. The city-designated market value for the property in 2022 is $44.2 million.

Violations and lawsuits

According to city public data, the property has received $5,000 in ECB penalties and $5,000 in OATH penalties in the last year.

There were no lawsuits or bankruptcies filed against the property for the past 24 months.

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 near average sales volume among other neighborhoods with $1.3 billion in sales volume in the last two years and is the 2nd highest in Brooklyn. For development, Downtown Brooklyn has near average amount of major developments among 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 14 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of three of the six commercial holdings in addition to Brooklyn Tabernacle. The two other identified owners are Sutton Management and Sol Goldman Investments. There are no active new building construction projects on this tax block.

The surrounding

Within a 400-foot radius of 17 Smith Street, PincusCo identified 12 commercial real estate items of interests occurred over the past 24 months. Of those 12 items, three were for major renovation including a certificate of occupancy change. They were one permit applications with a total initial cost of $271,250, one permit with a total initial cost of $300,000 and one initial temporary certificate of occupancy issuance for a project that initially costed $78.5 million. The most recent of these three items was the filing on December 15, 2021 for a 3,875-square-foot mercantile (M) building with zero residential units at 453 Fulton Street. Of those 12 items, four were sales above $5 million totaling $124.2 million. The most recent of the four was Extell Development which bought the 44,100-square-foot, one-unit retail building (K1) on 360 Fulton Street and six other properties for $85.9 million from Feil Organization on June 7, 2022. Of those 12 items, five were loans above $5 million totaling $468.8 million. The most recent of the five was St. Francis College in which borrowed $45 million from UMB Bank secured by two condo units in the 318,326-square-foot, four-unit mixed-use building (RC) on 422 Fulton Street on December 27, 2021.

Direct link to the property’s ACRIS page and link to DOB NOW portal.