Carmel Partners signs $22M refi loan with PNC Bank for 569-unit dev site in Brooklyn

Carmel Partners through the entity CP VI Crown Heights, LLC as borrower signed a refi loan with lender PNC Bank valued at $22 million for three properties including the development building (V3) at 54 Crown Street in Crown Heights, Brooklyn, development building (V0) at N/A Montgomery Street in Crown Heights, Brooklyn, and property at N/A Montgomery Street in Brooklyn.
The deal closed on September 2, 2022 and was recorded on October 5, 2022. The prior lender was Citibank which held debt that had an original loan amount of $22 million. The three properties have zero square feet of built space and 339,756 square feet of additional air rights for a total buildable of 339,756 square feet according to PincusCo analysis of city data. The loan  price per buildable square foot is $64 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 Carmel Partners was Dennis Markus. The signatory for PNC Bank was Thomas Murta.

The property

The N/A Crown Street parcel has frontage of 235 feet and is 262 feet deep with a total lot size of 55,385 square feet. The lot is irregular. The zoning is R8X which allows for up to 6.02 times floor area ratio (FAR) for residential with inclusionary housing. The city-designated market value for the property in 2022 is $6.3 million.

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 received $1,250 in ECB penalties and $1,300 in OATH penalties in the last year.

Development

On these lots, there is an active new building construction project. It is a new building project for a 569-unit, 394,528 square-foot R-2 building developed by Lee Bloch with plans filed June 26, 2019 and it has not been permitted yet.

The neighborhood

In Crown Heights, the bulk, or 38 percent of the 46.6 million square feet of commercial built space are walkup buildings, with elevator buildings next occupying 36 percent of the space. In sales, Crown Heights has 1.3 times the average sales volume among other neighborhoods with $457 million in sales volume in the last two years and is the 15th highest in Brooklyn. For development, Crown Heights has 2.7 times the average amount of major developments relative to other neighborhoods and is the 7th highest in Brooklyn. It had 2.6 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. There were two pre-foreclosure suit filed among other development buildings in the past 12 months.

The block

On the tax block of N/A Crown Street, PincusCo has identified the owners of six of the 11 commercial properties representing 252,785 square feet of the 252,785 square feet. The largest owner is GRJ Real Estate, followed by Pinnacle Group and then City of New York.
On the tax block, there were two new building construction projects totaling 562,364 square feet. The largest is a 569-unit, 394,528-square-foot R-2 building developed by Lee Bloch with plans filed June 26, 2019 and permitted January 7, 2020. The second largest is a 208-unit, 167,836-square-foot R-2 building developed by Shifra Hager with plans filed December 29, 2014 and permitted June 9, 2015.

the majority, or 100 percent of the 252,785 square feet of built space are elevator buildings, with specialty buildings next occupying 0 percent of the space.

The borrower

The PincusCo database currently indicates that Carmel Partners owned at least seven commercial properties in New York City with 14,029 square feet and a city-determined market value of $17.4 million. (Market value is typically about 50% of actual value.) The portfolio has $500 million in debt, borrowed from Wells Fargo. Within the portfolio, the bulk, or 57 percent of the 14,029 square feet of built space are mixed-use properties, with office properties next occupying 22 percent of the space. The bulk, or 78 percent of the built space, is in Manhattan, with Queens next at 22 percent of the space.

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