Gindi, Nakash, Chetrit sign $50.5M initial loan for warehouse project in Red Hook

Gindi Capital, Nakash Holdings, and the Chetrit Group through the entity Red Hook Indu OZ Owner LLC as borrower signed an initial loan with lender UMB Bank as trustee valued at $50.5 million for four development properties including 611, 627 and 659 Smith Street in Red Hook, Brooklyn.
The deal closed on March 21, 2023 and was recorded on March 30, 2023. The four properties have zero square feet of built space and 337,050 square feet of additional air rights for a total buildable of 337,050 square feet according to PincusCo analysis of city data. The loan price per buildable square foot is $149 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 signatory for Gindi Capital, Nakash Holdings, and Chetrit Group was Jack Braha. The Real Deal reported the three firms co-own the property and plan to develop a warehouse.

Because multiple properties have been transacted, some of the following sections will follow the property with the largest assessed value, which in this case, is the property on 627 Smith Street.

The property

The 627 Smith Street parcel has frontage of 237 feet and is 175 feet deep with a total lot size of 45,400 square feet. The lot is irregular. The zoning is M3-1 which allows for up to 2 times floor area ratio (FAR) for manufacturing The city-designated market value for the property in 2022 is $1.2 million.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the properties since September of 2020. In addition, according to city public data, the properties have not received any significant violations 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 Red Hook, the bulk, or 49 percent of the 9 million square feet of commercial built space are industrial buildings, with elevator buildings next occupying 28 percent of the space. In sales, Red Hook has 2 times the average sales volume among other neighborhoods with $688.5 million in sales volume in the last two years and is the 7th highest in Brooklyn. For development, Red Hook has had very little major development activity relative to other neighborhoods.It had 386,846 square feet of commercial and multi-family construction under development in the last two years, which represents 4 percent of the neighborhood’s built space.

The block

On the tax block of 627 Smith Street, PincusCo has identified the owner of the one commercial property that spans that spans zero square feet on the block.The identified owner is Gindi Capital.
There are no active new building construction projects on this tax block.

All properties are development.

The borrower

The PincusCo database currently indicates that Chetrit Group owned at least 33 commercial properties in New York City with 4,598,424 square feet and a city-determined market value of $777.8 million. (Market value is typically about 50% of actual value.) The portfolio has $1.6 billion in debt, with top three lenders as Starwood Mortgage Capital, Bank of Montreal, and Starwood Capital Group respectively. Within the portfolio, the bulk, or 49 percent of the 4,598,424 square feet of built space are elevator properties, with office properties next occupying 28 percent of the space. The bulk, or 69 percent of the built space, is in Manhattan, with Queens next at 26 percent of the space.
The PincusCo database currently indicates that Gindi Capital owned at least nine commercial properties in New York City with 100,661 square feet and a city-determined market value of $22.9 million. (Market value is typically about 50% of actual value.) The portfolio has $76.7 million in debt, borrowed from Israel Discount Bank and Goldman Sachs. Within the portfolio, the bulk, or 94 percent of the 100,661 square feet of built space are mixed-use properties, with retail properties next occupying 6 percent of the space. The bulk, or 59 percent of the built space, is in Queens, with Bronx next at 41 percent of the space.

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