Carmel Partners signs $233M construction loan for 569-unit development in Crown Heights

54 Crown Street (Credit - Google)

54 Crown Street (Credit - Google)

Carmel Partners through the entity CP VI Crown Heights, LLC as borrower signed a new construction loan with lender Goldman Sachs through the entity Goldman Sachs Bank USA valued at $233 million for the 569-unit development at 54 Crown Street in Crown Heights, Brooklyn.

There is is a new building project for a 569-unit, 394,528 square-foot R-2 building submitted by Carmel Partners and filed by Lee Bloch with plans filed June 26, 2019 and permitted January 7, 2020.
The deal closed on August 2, 2023 and was recorded on August 10, 2023. The prior lender was PNC Bank which held debt that had an original loan amount of $22 million.The property has zero square feet of built space and 333,417 square feet of additional air rights for a total buildable of 333,417 square feet according to a PincusCo analysis of city data. The loan price per built square foot is $N/A and the price per buildable square foot is $698 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 July 24, 2018, for $41 million. The signatory for Carmel Partners was Phil Owens. The signatory for Goldman Sachs was Daniel Alger.

The property

The 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 million. The most recent loan totaled $22 million and was provided by PNC Bank on September 2, 2022.

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 $10,000 in ECB penalties and $11,400 in OATH penalties in the last year.

The neighborhood

In Crown Heights, The bulk, or 39 percent of the 46.5 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 1.6 times the average sales volume among other neighborhoods with $555.1 million in sales volume in the last two years and is the 13th highest in Brooklyn. For development, Crown Heights has 2.9 times the average amount of major developments relative to other neighborhoods and is the 6th highest in Brooklyn. It had 3 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.

The block

On this tax block, PincusCo has identified the owners of six of the 10 commercial properties representing 120,948 square feet of the 120,948 square feet. The largest owner is Pinnacle Group, followed by GRJ Real Estate 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 residential (R-2) building submitted by Carmel Partners and filed 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 residential (R-2) building submitted by Cornell Realty Management and filed by Shifra Hager with plans filed December 29, 2014 and permitted June 9, 2015.

The majority, or 100 percent of the 120,948 square feet of built space are elevator buildings, with development buildings next occupying 0 percent of the space.

The borrower

The PincusCo database currently indicates that Carmel Partners owned at least nine commercial properties with 164 residential units in New York City with 119,311 square feet and a city-determined market value of $58.8 million. (Market value is typically about 50% of actual value.) The portfolio has $554.7 million in debt, with top three lenders as Wells Fargo, PCCP, and PNC Bank respectively. Within the portfolio, the bulk, or 88 percent of the 119,311 square feet of built space are elevator properties, with mixed-use properties next occupying 7 percent of the space. The bulk, or 97 percent of the built space, is in Manhattan, with Queens next at 3 percent of the space.

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