Davis Companies buys $21.6M note secured by office building in Boerum Hill

Davis Companies through the entity Div 540 Atlantic Lender, LLC bought a note with an original principal of $21.6 million from G4 Capital Partners secured by Gus Papadimitriou’s office building (O2) at 540 Atlantic Avenue in Boerum Hill, Brooklyn.
The deal closed on September 15, 2022 and was recorded on November 7, 2022. The prior lender was G4 Capital Partners which held debt that had an original loan amount of $21.6 million.

The property has 76,928 square feet of built space and 36,580 square feet of additional air rights for a total buildable of 113,428 square feet according to PincusCo analysis of city data.

Prior sales and revenue

The 76,928-square-foot property generated revenue of $1.7 million or $22 per square foot, according to the most recent income and expense figures.

The property

The 540 Atlantic Avenue parcel has frontage of 150 feet and is 180 feet deep with a total lot size of 28,357 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 $6.4 million.

Violations and lawsuits

The property was involved in one lawsuit and zero bankruptcies over the past two years. The suit was a $21.6 million commercial foreclosure concerning a loan filed on December 3, 2020, by G4 Capital Partners against Gus Papadimitriou. In addition, according to city public data, the property has received $9,000 in OATH penalties in the last year.

Development

On the lot, there is one active new building construction project for a six-unit, 1,248 square-foot R-2 building. The project was developed by Sam Teitelbaum with plans filed May 17, 2022 and it has not been permitted yet.

The neighborhood

In Boerum Hill, the bulk, or 34 percent of the 9.3 million square feet of commercial built space are elevator buildings, with specialty buildings next occupying 16 percent of the space. In sales, Boerum Hill has near average sales volume among other neighborhoods with $346.4 million in sales volume in the last two years and is the 19th highest in Brooklyn. For development, Boerum Hill has 1.2 times the average amount of major developments relative to other neighborhoods and is the 16th highest in Brooklyn. It had 1.2 million square feet of commercial and multi-family construction under development in the last two years, which represents 13 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of six of the 23 commercial properties representing 36,188 square feet of the 304,074 square feet. The largest owner is Debra Lennard, followed by Adam America Real Estate and then Sterling Town Equities.
On the tax block, there were five new building construction projects totaling 284,102 square feet. The largest is a 62-unit, 80,138-square-foot R-2 building developed by Josh Zucker with plans filed May 15, 2017 and permitted June 26, 2018. The second largest is a 43-unit, 67,572-square-foot R-2 building developed by Paul Amit with plans filed June 19, 2019 and permitted January 22, 2021.

The majority, or 36 percent of the 262,969 square feet of built space are elevator buildings, with office buildings next occupying 29 percent of the space.

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