Cheskel Schwimmer signs $135M construction loan for 218-unit development in Vinegar Hill

Cheskel Schwimmer through the entity Toe Front Realty LLC as borrower signed a new construction loan with lender Valley National Bank valued at $135 million for the 218-unit development project at 218 Front Street in Vinegar Hill, Brooklyn.

This is the ninth largest construction loan provided this year in Brooklyn. The largest so far has been  Apollo Global Management and Witkoff through the entity Brook NY Residential LLC as borrower signed a new construction loan with lender Bank of America valued at $388.4 million for the development at 589 Fulton Street in Downtown Brooklyn, Brooklyn.

The Schwimmer deal closed on October 7, 2022 and was recorded on October 20, 2022. The prior lender was Popular Bank which held debt that had an original loan amount of $36 million.

On the lot, there is one active new building construction project for a 218-unit, 147,196 square-foot residential (R-2) building. The project was developed by Cheskel Schwimmer with plans filed December 30, 2021.
The owner bought the property on October 27, 2021, for $48.5 million. The signatory for Cheskel Schwimmer was Cheskel Schwimmer. The signatory for Valley National Bank was Jeffrey Puchin.

The property

The 218 Front Street parcel has frontage of 164 feet and is 150 feet deep with a total lot size of 49,200 square feet. The lot is irregular. The zoning is R6A which allows for up to 3 times floor area ratio (FAR) for residential with inclusionary housing. The city-designated market value for the property in 2022 is $4.1 million.The most recent loan totaled $36 million and was provided by Popular Bank on October 27, 2021.

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 one DOB violation, $10,625 in ECB penalties, and $19,325 in OATH penalties in the last year.

The neighborhood

In Vinegar Hill, the majority, or 67 percent of the 2.1 million square feet of commercial built space are elevator buildings, with office buildings next occupying 13 percent of the space. In sales, Vinegar Hill has had very little sales volume relative to other neighborhoods with $110.7 million in sales volume in the last two years. For development, Vinegar Hill has had very little major development activity relative to other neighborhoods.It had -45,903 square feet of commercial and multi-family construction under development in the last two years, which represents -2.16 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of two of the 26 commercial properties representing 51,871 square feet of the 84,831 square feet. The two identified owners are Urban Realty Partners and Bruce A. Brand.
On the tax block, there was one new building construction project filed totaling 147,196 square feet. It is a 218-unit, 147,196-square-foot R-2 building developed by Cheskel Schwimmer with plans filed December 30, 2021 and it has not been permitted yet.

The majority, or 70 percent of the 77,044 square feet of built space are industrial buildings, with elevator buildings next occupying 11 percent of the space.

The borrower

The PincusCo database currently indicates that Cheskel Schwimmer owned at least 19 commercial properties in New York City with 685,340 square feet and a city-determined market value of $85.7 million. (Market value is typically about 50% of actual value.) The portfolio has $274.1 million in debt, with top three lenders as Prime Group Holdings, Valley National Bank, and IceCap Group respectively. Within the portfolio, the bulk, or 88 percent of the 685,340 square feet of built space are elevator properties, with walkup properties next occupying 11 percent of the space. The bulk, or 62 percent of the built space, is in Bronx, with Brooklyn next at 38 percent of the space.

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