Chestnut Holdings pays $10.3M for 85-unit rental in Flatbush that was in bankruptcy

Chestnut Holdings of New York through the entity 555 O LLC paid $10.3 million for the 85-unit residential elevator building (D1) at 555 Ocean Avenue in Flatbush, Brooklyn that was in bankruptcy. The former owner who filed to place the building into bankruptcy was Daniel Reifer through the entity Three Nickels LLC.
The deal closed on March 5, 2024 and was recorded on March 15, 2024. The property has 103,472 square feet of built space and 9,315 square feet of additional air rights for a total buildable of 112,920 square feet according to a PincusCo analysis of city data. The sale price per built square foot is $100 and the price per buildable square foot is $91 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.)
Daniel Reifer bought the property on October 17, 2007, for $7.7 million. The signatory for the bankruptcy court was attorney Howard P. Magaliff. The signatory for Chestnut Holdings of New York was Daniel Wiener. The contract date was February 28, 2024. This is a bankruptcy sale. Daniel Reifer filed to place the property in bankruptcy in 2023, 23-41456 Howard P. Magaliff is the bankruptcy plan administrator.

The purchase was financed with a $7.2 million loan from KMR Equity Partners, which was a lender that bought the debt on the property, which later filed for bankruptcy.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer Chestnut Holdings of New York purchased one property in one transaction for a total of $18 million and has no record it sold any properties over the past 24 months.
The seller Daniel Reifer 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 Daniel Reifer, head officer and Bevin Kaplan, officer. The business entity is Three Nickels Llc.

The property

The residential elevator building with 85 residential units in Flatbush has 103,472 square feet of built space and 9,315 square feet of additional air rights for a total buildable of 112,920 square feet according to a PincusCo analysis of city data. The parcel has frontage of 129 feet and is 210 feet deep with a total lot size of 28,230 square feet. The lot is irregular. The zoning is R7A which allows for up to 4 times floor area ratio (FAR) for residential with inclusionary housing. The city-designated market value for the property in 2022 is $4.9 million. The most recent loan totaled 0.0 and was provided by Camporeale Law Group registered on June 27, 2022.

Violations and lawsuits

The property was involved in one lawsuit and one bankruptcy over the past two years. The suit was a $11.2 million commercial foreclosure concerning a loan filed on July 7, 2022, by Ocean Lender LLC against Daniel Reifer and RMC Equities. The bankruptcy was filed on April 27, 2023, by Daniel Reifer citing assets of $13.3 million. In addition, according to city public data, the property has received one DOB violation, $3,125 in ECB penalties, 100 housing violations, $10,725 in OATH penalties, and two housing litigations in the last year.

Development

There are no active new building construction projects or major alteration projects with initial costs more than $1 million on this tax lot.

The block

On this tax block, PincusCo has identified the owners of nine of the 14 commercial properties representing 394,459 square feet of the 504,849 square feet. The largest owner is Zalmen Management, followed by Sam Farkas and then RMC Equities.
There are no active new building construction projects on this tax block.

The majority, or 72 percent of the 504,849 square feet of built space are elevator buildings, with walkup buildings next occupying 23 percent of the space.

The buyer

The PincusCo database currently indicates that Chestnut Holdings Of New York owned at least 146 commercial properties with 6,398 residential units in New York City with 6,297,772 square feet and a city-determined market value of $432.5 million. (Market value is typically about 50% of actual value.) Within the portfolio, the bulk, or 61 percent of the 6,297,772 square feet of built space are elevator properties, with walkup properties next occupying 39 percent of the space. The bulk, or 86 percent of the built space, is in Bronx, with Manhattan next at 9 percent of the space.

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