Domain, VOREA sign $176M construction loan with Bank OZK for 360-unit development in Gowanus

Domain Companies and VOREA Group through the entity 420 Carroll LLC as borrower signed a new construction loan with lender Bank OZK valued at $176 million for the development building (V1) at 420 Carroll Street in Gowanus, Brooklyn.
The deal closed on June 24, 2022 and was recorded on July 12, 2022. The prior lender was CIT Bank which held debt that had an original loan amount of $56.2 million.
The owner bought the property on February 7, 2018, for $47.5 million. The signatory for Domain Companies was Matthew Schwartz. The LLC was listed in c/o of the Domain Companies on the previous mortgage.

The property

The 420 Carroll Street parcel has frontage of 239 feet and is 233 feet deep with a total lot size of 39,153 square feet. The lot is irregular. The zoning is M2-1 which allows for up to 2 times floor area ratio (FAR) for manufacturing The city-designated market value for the property in 2022 is $705,000.The most recent loan totaled $31.2 million and was provided by CIT Bank on January 31, 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 not received any significant violations in the last year.

Development

On these lots, there is one active new building construction project for a 360-unit, 385,231-square-foot R-2 building. The project was developed by Peter Papamichael of the VOREA Group with plans filed October 29, 2021 and it has not been permitted yet.

The neighborhood

In Gowanus, the bulk, or 46 percent of the 9.5 million square feet of commercial built space are industrial buildings, with residential elevator buildings next occupying 18 percent of the space. In sales, Gowanus has near average sales volume among other neighborhoods with $362.5 million in sales volume in the last two years and is the 14th highest in Brooklyn. For development, Gowanus is the 7th most active neighborhood among other neighborhoods. It had 5.4 million square feet of commercial and multi-family construction under development in the last two years, which represents 57 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of three of the 11 commercial properties representing 1,834 square feet of the 142,069 square feet. The two identified owners are Domain Companies and Mccallum Burr Alexandra. There are three active new building construction projects totaling 413,603 square feet. The largest is a six-unit, 10,500-square-foot R-2 building developed by Michele Cohen with plans filed January 10, 2013 and it has not been permitted yet.The second largest is a one-unit, 17,872-square-foot F-2 building developed by Michel Cohen with plans filed July 17, 2015 and permitted April 10, 2019.

the majority, or 87 percent of the 142,069 square feet of built space are industrial buildings, with residential walkup buildings next occupying 7 percent of the space.

The borrower

The PincusCo database currently indicates that Domain Companies owned at least 15 commercial properties in New York City with 513,372 square feet and a city-determined market value of $67.5 million. (Market value is typically about 50% of actual value.) The portfolio has $192.8 million in debt, with top three lenders as PNC Bank, Carmel Partners, and Fundamental Advisors respectively. Within the portfolio, the bulk, or 48 percent of the 513,372 square feet of built space are rental condo properties, with elevator properties next occupying 41 percent of the space. The bulk, or 97 percent of the built space, is in Brooklyn, with Queens next at 2 percent of the space.

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