Haimo Zhong pays $6M for mixed-use in Bushwick

Haimo Zhong through the entity Bw1275 LLC paid $6 million to Choy Ling Lam through the entity 1275 Broadway LLC for the corner mixed-use building at 1275 Broadway in Bushwick, Brooklyn.
The deal closed on April 12, 2022 and was recorded on May 3, 2022.

The property has 8,940 square feet of built space and 18,174 square feet of additional air rights for a total buildable of 27,094 square feet according to PincusCo analysis of city data. The sale price per built square foot is $671 and the price per buildable square foot is $221 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 June 15, 2016, for $6.1 million. The signatory for Choy Ling Lam was Choy Ling Lam. The signatory for Haimo Zhong was Haimo Zhong.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer Haimo Zhong purchased four properties in one transactions for a total of $4.6 million and has no record it sold any properties over the past 24 months.
The seller Choy Ling Lam had not purchased any other properties and had not sold any properties over the same time period. The 8,940-square-foot property generated revenue of $323,500 or $36 per square foot, according to the most recent income and expense figures.

The property

The 1275 Broadway parcel has frontage of 39 feet and is 250 feet deep with a total lot size of 11,150 square feet. The lot is irregular. The zoning is C4-3 which allows for up to 3.4 times floor area ratio (FAR) for commercial and up to 2.43 times FAR for residential. The city-designated market value for the property in 2022 is $1.1 million.

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 $300 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 Bushwick, the bulk, or 32 percent of the 51.4 million square feet of commercial built space are 1-4 family buildings, with residential walkup buildings next occupying 29 percent of the space. In sales, Bushwick has 3.3 times the average sales volume among other neighborhoods with $910.2 million in sales volume in the last two years and is the 3rd highest in Brooklyn. For development, Bushwick has 1.2 times the average amount of major developments relative to other neighborhoods and is the 18th highest in Brooklyn. It had 1.1 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 mixed-use buildings in the past 12 months.

The block

On this tax block, PincusCo has identified the owners of five of the 17 commercial properties representing 43,090 square feet of the 142,251 square feet. The largest owner is Moshe Silberstein, followed by Greenbrook Partners and then S&J Sunny Realty III, LLC. There is one active new building construction project totaling 5,038 square feet. It is a seven-unit, 5,038-square-foot R-2 building developed by Meshulam Hass with plans filed June 3, 2015 and permitted February 12, 2018.

The majority, or 29 percent of the 200,440 square feet of built space are mixed-use buildings, with retail buildings next occupying 27 percent of the space.

The seller

The PincusCo database currently indicates that Choy Ling Lam owned at least four commercial properties with 160,841 square feet and a city-determined market value of $21.1 million. (Market value is typically about 50% of actual value.) The portfolio has $68.1 million in debt, with top three lenders as Benefit Street Partners, Midfirst Bank, and Hirshmark Capital respectively. Within the portfolio, the bulk, or 94 percent of the 160,841 square feet of built space are residential elevator properties, with mixed-use properties next occupying 6 percent of the space. The bulk, or 82 percent of the built space, is in Queens, with Brooklyn next at 18 percent of the space.

The buyer

The PincusCo database currently indicates that Haimo Zhong owned at least five commercial properties with 23,729 square feet and a city-determined market value of $3.2 million. (Market value is typically about 50% of actual value.) Within the portfolio, the bulk, or 52 percent of the 23,729 square feet of built space are mixed-use properties, with industrial properties next occupying 32 percent of the space. The bulk, or 52 percent of the built space, is in Brooklyn, with Queens next at 48 percent of the space.

Surrounding

Within a 400-foot radius of 1275 Broadway, PincusCo identified three commercial real estate items of interests occurred over the past 24 months.
Of those three items, one was in new building development. It was a new building permit application filed on March 29, 2022 for a 65,351-square-foot R-2 building with 89 residential units at 850 Lexington Avenue.
Of those three items, two were loans above $5 million totaling $44.8 million. The most recent of the two was Joel Wertzberger which borrowed $13.7 million from Sterling National Bank secured by the 6,500-square-foot, 16-unit rental (D6) on 1262 Broadway and one other property on October 6, 2021.

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