FBE Limited signs $26.5M refi loan with Signature Bank for shelter in Flatbush

FBE Limited through the entity EBF Tilden Avenue LLC as borrower signed a refi loan with lender Signature Bank valued at $26.5 million for the midblock 117-unit homeless shelter building at 2520 Tilden Avenue in Flatbush, Brooklyn, known as Tilden Hall.
The deal closed on April 1, 2022 and was recorded on April 15, 2022. The prior lender was Signature Bank which held debt that had an original loan amount of $22.8 million.The property has 86,360 square feet of built space according to PincusCo analysis of city data. The loan price per built square foot is $306 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 owner bought the property on December 22, 2016, for $31 million. The signatory for FBE Limited was Yehoshua Leib Fruchthandler. The signatory for Signature Bank was Paul Kotronis. Yehoshua Leib Fruchthandler is the manager of FBE Limited.

Prior sales and revenue

The owners according to the Department of Housing Preservation and Development includes Yitzchok Fruchthandler, head officer and Daniel Candelario, agent. The business entity is Tilden Hall. The 86,360-square-foot property generated revenue of $7.7 million or $89 per square foot, according to the most recent income and expense figures.

The property

The 2518 Tilden Avenue parcel has frontage of 112 feet and is 245 feet deep with a total lot size of 33,900 square feet. The lot is irregular. The zoning is R6 which allows for up to 2.43 times floor area ratio (FAR) for residential. The city-designated market value for the property in 2022 is $20.1 million.

Violations and lawsuits

The property was not involved in any lawsuits or bankruptcies in the past years. In addition, according to city public data, the property has received two DOB violations, $5,030 in ECB penalties, three housing violations, and $9,095 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 neighborhood

In Flatbush, the bulk, or 47 percent of the 51.8 million square feet of commercial built space are residential elevator buildings, with 1-4 family buildings next occupying 17 percent of the space. In sales, Flatbush has had very little sales volume relative to other neighborhoods with $208.8 million in sales volume in the last two years. For development, Flatbush has near average amount of major developments among other neighborhoods and is the 20th highest in Brooklyn. It had 1 million square feet of commercial and multi-family construction under development in the last two years, which represents 2 percent of the neighborhood’s built space. There was one pre-foreclosure suit filed among other hotel buildings in the past 12 months.

The block

On this tax block, PincusCo has identified the owners of three of the nine commercial properties representing 104,610 square feet of the 147,054 square feet. The largest owner is FBE Limited, followed by Mark Weinberger and then Consolidated Edison. There are two active new building construction projects totaling 17,624 square feet. The largest is a 19-unit, 12,809-square-foot R-2 building developed by Mikel Jeremias with plans filed July 31, 2019 and it has not been permitted yet. The second largest is a seven-unit, 4,815-square-foot R-2 building developed by Ka Yau with plans filed August 16, 2018 and it has not been permitted yet.

The majority, or 37 percent of the 232,491 square feet of built space are short-term occupancy buildings, with 1-4 family buildings next occupying 37 percent of the space.

The borrower

The PincusCo database currently indicates that FBE Limited owned at least 30 commercial properties with 1,586,708 square feet and a city-determined market value of $167.2 million. (Market value is typically about 50% of actual value.) The portfolio has $320.9 million in debt, with top three lenders as Signature Bank, New York Community Bank, and Santander Bank respectively. Within the portfolio, the bulk, or 76 percent of the 1,586,708 square feet of built space are residential elevator properties, with residential walkup properties next occupying 15 percent of the space. The bulk, or 52 percent of the built space, is in Brooklyn, with Bronx next at 39 percent of the space.

Surrounding

Within a 400-foot radius of 2518 Tilden Avenue, PincusCo identified seven commercial real estate items of interests occurred over the past 24 months.
Of those seven items, one was for major renovation including a certificate of occupancy change. It was an initial temporary certificate of occupancy issued on February 9, 2021 for the $1.5 million renovation of 9,196-square-foot R-2 building with 14 residential units at 169 Lott St.
Of those seven items, six were loans above $5 million totaling $52 million. The most recent of the six was Abraham Posner which borrowed $9.2 million from Valley National Bank secured by the 21,301-square-foot, 28-unit rental (D6) on 1010-1012 Rogers Avenue on July 19, 2021.

Direct link to Acris document. link