Bushburg signs $105M construction loan for 320-unit project in East New York

Bushburg Properties through the entity Empire State Dairy LLC as borrower signed a new construction loan with lender Valley National Bank valued at $105 million for the 320-unit project at 2840 Atlantic Avenue in East New York, Brooklyn.
The deal closed on May 19, 2022 and was recorded on June 21, 2022. The prior lender was Cross River Bank which held debt that had an original loan amount of $13.2 million. The property has 36,000 square feet of built space and 226,969 square feet of additional air rights for a total buildable of 262,760 square feet according to PincusCo analysis of city data. The loan price per built square foot is $2,916 and the price per buildable square foot is $399 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 owner bought the property on September 6, 2018, for $16.8 million. The signatory for Bushburg Properties was Abraham J. Hoffman. The signatory for Valley National Bank was Victor S. Brown Jr. and Roland M. Cablayan. Abraham Hoffman is founder and CEO of Bushberg. 

The property

The 2840 Atlantic Avenue parcel has frontage of 200 feet and is 235 feet deep with a total lot size of 43,648 square feet. The lot is irregular. The zoning is M1-4/R8A which allows for up to 2 times floor area ratio (FAR) for manufacturing and up to 6.02 times FAR for residential with inclusionary housing. The city-designated market value for the property in 2022 is $3.6 million.The most recent loan totaled $13.2 million and was provided by Cross River Bank on January 28, 2022.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the property since September of 2020. In addition, according to city public data, the property has received $15,000 in ECB penalties and $16,250 in OATH penalties in the last year.

Development

On these lots, there is one active new building construction project for a 320-unit, 273,133-square-foot R-2 building. The project was developed by Abraham Hoffman’s Bushburg with plans filed June 27, 2019 and it has not been permitted yet.

The neighborhood

In East New York, the bulk, or 31 percent of the 68.3 million square feet of commercial built space are 1-4 family buildings, with residential elevator buildings next occupying 26 percent of the space. In sales, East New York has the 4th highest sale turnover among other neighborhoods in the city with $2.1 billion in sales volume in the last two years. For development, East New York has 2.5 times the average amount of major developments relative to other neighborhoods and is the 8th highest in Brooklyn. It had 2.2 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 this tax block, PincusCo has identified the owners of one of the 12 commercial properties representing 36,000 square feet of the 60,864 square feet. The identified owner is Bushburg Properties. There is one active new building construction project totaling 273,133 square feet. It is a 320-unit, 273,133-square-foot R-2 building developed by Abraham Hoffman with plans filed June 27, 2019 and it has not been permitted yet.

The majority, or 81 percent of the 69,294 square feet of built space are industrial buildings, with specialty buildings next occupying 10 percent of the space.

The borrower

The PincusCo database currently indicates that Bushburg Properties owned at least four commercial properties with 311,566 square feet and a city-determined market value of $31.4 million. (Market value is typically about 50% of actual value.) The portfolio has $54.2 million in debt, with top three lenders as Kearny Bank, Jovia Financial Federal Credit Union, and Cross River Bank respectively. Within the portfolio, the bulk, or 40 percent of the 311,566 square feet of built space are C5 properties, with office properties next occupying 31 percent of the space. The bulk, or 83 percent of the built space, is in Brooklyn, with Queens next at 17 percent of the space.

Surrounding

Within a 400-foot radius of 2840 Atlantic Avenue, PincuscCo identified three commercial real estate items of interests occurred over the past 24 months.
Of those three items, two were in new building development. There were one new building permit application and one new building permit. The most recent of these two items was a filing on February 18, 2022 for a 127,821-square-foot R-2 building with 178 residential units at 2886 Atlantic Avenue.
One of those three items was a sale which Jay Group bought the 1,597-square-foot, one-unit retail building (G4) on 2864 Atlantic Avenue for $7.5 million from Speedway on March 31, 2022.

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