Carlyle, Z+G pay $97.5M to Joel Werzberger, Yoel Hershkowitch for 123-unit project in Williamsburg

Carlyle Group and Z+G Property Group through the entity 416 Metropolitan Ave Owner, L.L.C. paid $97.5 million to Joel Werzberger and Yoel Hershkowitch through the entity 420 Metro LLC for the 123-unit new building at 8 Marcy Avenue also known as 416 Metropolitan Avenue in Williamsburg, Brooklyn.
The deal closed on July 26, 2023 and was recorded on August 10, 2023.

The acquisition was financed with a $55.2 million loan from Invesco. The prior debt was $72.5 million loan from BridgeCity Capital.

The seller bought the property on August 25, 2020, for $19 million. The signatory for Joel Werzberger and Yoel Hershkowitch was Joel Werzberger. The signatory for Carlyle Group and Z+G Property Group was Jason Hart. The contract date was March 31, 2023.

According to Real Estate Weekly, “8 Marcy has two fully occupied commercial units, 86 market rate and 37 affordable apartments comprised of 31 studios, 65 one-bedrooms and 27 two-bedrooms, which were fully leased within a three-month period. JLL represented the seller, Prospect Development, which is led by Joel Wertzberger and Konstantin Gubareff.”

The brokers were JLL team of Ethan Stanton, Jeffrey Julien, Brendan Maddigan, Stephen Palmese, Rob Hinckley, Michael Mazzara, Winfield Clifford, Steven Rutman and Jay Leshinsky.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer Carlyle Group purchased 176 properties in 158 transactions for a total of $945.6 million and sold one property in one transactions for a total of $4 million over the past 24 months.
The seller Joel Werzberger had not purchased any other properties and had not sold any properties over the same time period. The former owners according to the Department of Housing Preservation and Development includes Joel Wertzberger, head officer and Abraham Pollack, site manager. The business entities are Joyland Management and 420 Metro Llc.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the property for the past 24 months. In addition, according to city public data, the property has received three housing violations and $6,100 in OATH penalties in the last year.

Development

On the lot, there was one active new building construction project for a 123-unit, 97,915 square-foot R-2 building. The project was submitted by Mattone Investors and filed by Christopher Todd with plans filed August 11, 2020 and permitted March 7, 2022.

The neighborhood

In Williamsburg, The bulk, or 39 percent of the 50.4 million square feet of commercial built space are elevator buildings, with walkup buildings next occupying 25 percent of the space. In sales, Williamsburg has the 5th highest sale turnover among other neighborhoods in the city with $2.5 billion in sales volume in the last two years. For development, Williamsburg is the 9th most active neighborhood among other neighborhoods. It had 4.3 million square feet of commercial and multi-family construction under development in the last two years, which represents 8 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of 15 of the 22 commercial properties representing 172,442 square feet of the 190,947 square feet. The largest owner is Yoel Hershkowitch, followed by Paul Henry and then Patoma.
On the tax block, there were three new building construction projects totaling 111,365 square feet. The largest is a 123-unit, 97,915 square-foot residential (R-2) building submitted by Mattone Investors and filed by Christopher Todd with plans filed August 11, 2020 and permitted March 7, 2022. The second largest is a two-unit, 8,092 square-foot residential (R-3) building submitted by Thomas Finnican with plans filed August 4, 2015 and permitted April 19, 2017.

The majority, or 63 percent of the 190,947 square feet of built space are elevator buildings, with mixed-use buildings next occupying 30 percent of the space.

The seller

The PincusCo database currently indicates that Yoel Hershkowitch owned at least seven commercial properties with 49 residential units in New York City with 39,825 square feet and a city-determined market value of $9.1 million. (Market value is typically about 50% of actual value.) The portfolio has $72.5 million in debt, borrowed from Bridge City Funding. Within the portfolio, the bulk, or 74 percent of the 39,825 square feet of built space are walkup properties, with C3 properties next occupying 18 percent of the space. They are all located in Brooklyn.
The PincusCo database currently indicates that Joel Werzberger owned at least six commercial properties with 129 residential units in New York City with 124,242 square feet and a city-determined market value of $10.3 million. (Market value is typically about 50% of actual value.) The portfolio has $40.5 million in debt, with top three lenders as Northeast Community Bank, Arbor Realty Trust, and TD Bank respectively. Within the portfolio, the bulk, or 60 percent of the 124,242 square feet of built space are walkup properties, with elevator properties next occupying 40 percent of the space. The bulk, or 86 percent of the built space, is in Bronx, with Brooklyn next at 14 percent of the space.

The buyer

The PincusCo database currently indicates that Carlyle Group owned at least 239 commercial properties with 2,378 residential units in New York City with 2,824,176 square feet and a city-determined market value of $731 million. (Market value is typically about 50% of actual value.) The portfolio has $1.1 billion in debt, with top three lenders as Invesco Real Estate, Invesco, and Santander Bank respectively. Within the portfolio, the bulk, or 52 percent of the 2,824,176 square feet of built space are elevator properties, with walkup properties next occupying 15 percent of the space. The bulk, or 39 percent of the built space, is in Brooklyn, with Queens next at 32 percent of the space.

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