Doe Fund signs $52.6M new construction loan for shelter in Bedford Stuyvesant

Doe Fund through the entity 510 Gates Avenue Housing Development Fund Corp. as borrower signed a new construction loan with lender UMB Bank through the entity Umb Bank, N.A. valued at $52.6 million for the office building (O2) at 510 Gates Avenue in Bedford Stuyvesant, Brooklyn.
On the lot, there is one active new building construction project for a 32-unit, 37,106 square-foot shelter (R-1) building. The project was developed by John Mcdonald with plans filed October 21, 2021 and it has not been permitted yet.
The deal closed on December 22, 2022 and was recorded on January 3, 2023.
The owner bought the property on May 15, 2020, for $11.1 million. The signatory for Doe Fund was John McDonald. The signatory for UMB Bank was Jill Fullmer.

Prior sales and revenue

The 32,883-square-foot property generated revenue of $932,233 or $28 per square foot, according to the most recent income and expense figures.

The property

The 510 Gates Avenue parcel has frontage of 108 feet and is 125 feet deep with a total lot size of 12,117 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 $2.8 million. The most recent loan totaled $13.4 million and was provided by KeyBank on May 15, 2020.

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 two DOB violations in the last year.

The neighborhood

In Bedford Stuyvesant, the bulk, or 34 percent of the 53.8 million square feet of commercial built space are elevator buildings, with walkup buildings next occupying 30 percent of the space. In sales, Bedford Stuyvesant has 2.3 times the average sales volume among other neighborhoods with $821.7 million in sales volume in the last two years and is the 5th highest in Brooklyn. For development, Bedford Stuyvesant has 3.8 times the average amount of major developments relative to other neighborhoods and is the 4th highest in Brooklyn. It had 3.9 million square feet of commercial and multi-family construction under development in the last two years, which represents 7 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of 13 of the 24 commercial properties representing 133,662 square feet of the 168,736 square feet. The largest owner is Yossel Lichtman, followed by Vincent Fairweather and then Theodore Feldhiem.
On the tax block, there were two new building construction projects totaling 41,106 square feet. The largest is a 32-unit, 37,106-square-foot R-1 building developed by John McDonald with plans filed October 21, 2021 and it has not been permitted yet.The second largest is a four-unit, 4,000-square-foot R-2 building developed by Benzion Sprei with plans filed July 12, 2013 and permitted December 8, 2016.

The majority, or 36 percent of the 168,736 square feet of built space are walkup buildings, with elevator buildings next occupying 24 percent of the space.

The borrower

The PincusCo database currently indicates that Doe Fund owned at least six commercial properties in New York City with 225,139 square feet and a city-determined market value of $13.7 million. (Market value is typically about 50% of actual value.) The portfolio has $145.6 million in debt, with top three lenders as NYC Housing Development Corporation, Merchants Bank of Indiana, and Wells Fargo respectively. Within the portfolio, the bulk, or 66 percent of the 225,139 square feet of built space are elevator properties, with office properties next occupying 15 percent of the space. The bulk, or 72 percent of the built space, is in Bronx, with Brooklyn next at 28 percent of the space.

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