FBE Limited pays $30.5M to buy 63-unit rental in Crown Heights previously owned by Mendel Kaff

FBE Limited through the entity Ebf Washington B LLC (and others) paid $30.5 million to the entity SJ Washington LLC, previously owned by Mendel Kaff, for the 63-unit residential elevator building (D5) at 781 Washington Avenue in Crown Heights, Brooklyn.

IN May 2022, Mendel Kaff sold adjacent properties for $17 million. In that transaction, Joseph Rubin and Shmuel A. Haikins through the entity Bd781 LLC paid $17 million to Mendel Kaff through the entity SJ Washington LLC for property at 478 Saint Johns Place in Crown Heights, Brooklyn and property at 419 Lincoln Place in Crown Heights, Brooklyn. In March 2022, Ahron Gluck filed new building plans for two buildings with a total of 64 residential units.

The new sale closed on November 30, 2022 and was recorded on December 6, 2022. The property has 47,925 square feet of built space and 88,725 square feet of additional air rights for a total buildable of 136,500 square feet according to PincusCo analysis of city data. The sale price per built square foot is $636 and the price per buildable square foot is $223 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.)
The seller bought the property on May 20, 2021, for $22 million. The signatory for Mendel Kaff was Issac Schwartz. The signatory for FBE Limited was Yehoshua Leib Fruchthandler. The property was formerly owned by Mendel Kaff, who assigned his interests to FBE in June 2022 through an unusual document transfer.

Prior sales and revenue

Prior to this transaction, Pincusco has records that the buyer FBE Limited purchased 12 properties in five transactions for a total of $168 million and sold three properties in three transactions for a total of $214.9 million over the past 24 months.
The seller Mendel Kaff purchased four properties in four transactions for a total of $195.7 million and sold two properties in one transactions for a total of $17 million over the same time period. The former owners according to the Department of Housing Preservation and Development includes David Kornitzer, head officer and Douglas Rosenberg, head officer. The business entity is Sj Washington Llc. The 47,925-square-foot property generated revenue of $1.8 million or $37 per square foot, according to the most recent income and expense figures.

The property

The 781 Washington Avenue parcel has frontage of 141 feet and is 226 feet deep with a total lot size of 34,125 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 $6.9 million.The most recent loan totaled $16.5 million and was provided by Sterling National Bank on May 20, 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 four housing violations and $600 in OATH penalties in the last year.

Development

There are no active new building construction projects or major alteration projects with initial costs more than $5 million on this tax lot.

The block

On this tax block, PincusCo has identified the owners of 10 of the 24 commercial properties representing 208,762 square feet of the 270,949 square feet. The largest owner is Mendel Kaff, followed by Isaac Stern and then MHANY Management.
On the tax block, there were two new building construction projects totaling 39,665 square feet. The largest is a 34-unit, 24,225-square-foot R-2 building developed by Ahron Gluck with plans filed March 29, 2022 and it has not been permitted yet.The second largest is a 30-unit, 15,440-square-foot R-2 building developed by Ahron Gluck with plans filed May 11, 2022 and it has not been permitted yet.

the majority, or 65 percent of the 270,949 square feet of built space are elevator buildings, with walkup buildings next occupying 24 percent of the space.

The seller

The PincusCo database currently indicates that Mendel Kaff owned at least six commercial properties in New York City with 796,051 square feet and a city-determined market value of $48.8 million. (Market value is typically about 50% of actual value.) The portfolio has $206.3 million in debt, with top three lenders as Bank of Montreal, Starwood Mortgage Capital, and Bank of Princeton respectively. Within the portfolio, the bulk, or 82 percent of the 796,051 square feet of built space are elevator properties, with walkup properties next occupying 18 percent of the space. The bulk, or 94 percent of the built space, is in Bronx, with Brooklyn next at 6 percent of the space.

The buyer

The PincusCo database currently indicates that FBE Limited owned at least 36 commercial properties in New York City with 963,342 square feet and a city-determined market value of $144.1 million. (Market value is typically about 50% of actual value.) Within the portfolio, the bulk, or 62 percent of the 963,342 square feet of built space are elevator properties, with rental condo properties next occupying 18 percent of the space. The bulk, or 77 percent of the built space, is in Brooklyn, with Manhattan next at 15 percent of the space.

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