Investor pays $13.9M for 96-unit conversion project in Gowanus

An investor through the entity Baltic Heights LLC paid $13.9 million to Scott Pedowitz through the entity 524 Baltic Holding Co. LLC for the retail building (K1) at 524 and 526 Baltic Street in Gowanus, Brooklyn.
On this lot, there is one active major alteration construction project for a 96-unit, 74,629 square-foot R-2 building. The project was submitted by Scott Pedowitz with plans filed February 3, 2022 and permitted March 4, 2022.

The deal closed on November 21, 2023 and was recorded on November 30, 2023. The property has 12,500 square feet of built space and 50,000 square feet of additional air rights for a total buildable of 62,500 square feet according to a PincusCo analysis of city data. The sale price per buildable square foot is $222 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 Scott Pedowitz was Scott Pedowitz. The contract date was December 7, 2021. A contract was recorded in 2022 with buyer Yitzchok Katz under a different buyer LLC, so it appears the contract was flipped to the new buyer. The new buyer shares an address with Solomon Schwimmer, but the signatory was not Schwimmer.

The property

The retail building in Gowanus has 12,500 square feet of built space and 50,000 square feet of additional air rights for a total buildable of 62,500 square feet according to a PincusCo analysis of city data. The parcel has frontage of 125 feet and is 100 feet deep with a total lot size of 12,500 square feet. The lot is irregular. The zoning is M1-4/R7X which allows for up to 2 times floor area ratio (FAR) for manufacturing and up to 5 times FAR for residential with inclusionary housing. The city-designated market value for the property in 2022 is $2.6 million. The most recent loan totaled $6 million and was provided by TD Bank on February 4, 2022.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the properties for the past 24 months. In addition, according to city public data, the properties have received $1,000 in OATH penalties in the last year.

The neighborhood

In Gowanus, The bulk, or 46 percent of the 9.2 million square feet of commercial built space are industrial buildings, with elevator buildings next occupying 19 percent of the space. In sales, Gowanus has 2 times the average sales volume among other neighborhoods with $712.7 million in sales volume in the last two years and is the 7th highest in Brooklyn. For development, Gowanus has 3.6 times the average amount of major developments relative to other neighborhoods and is the 3rd highest in Brooklyn. It had 3.6 million square feet of commercial and multi-family construction under development in the last two years, which represents 39 percent of the neighborhood’s built space.

The block

On the tax block of 524 Baltic Street, PincusCo has identified the owners of two of the nine commercial properties representing 41,577 square feet of the 81,548 square feet. The two identified owners are Yitzchok Katz and Three Wall Capital.
There are no active new building construction projects on this tax block.

The majority, or 49 percent of the 81,548 square feet of built space are industrial buildings, with hotel buildings next occupying 36 percent of the space.

The buyer

The PincusCo database currently indicates that Solomon Schwimmer owned at least 33 commercial properties with 456 residential units in New York City with 370,028 square feet and a city-determined market value of $67.9 million. (Market value is typically about 50% of actual value.) The portfolio has $183 million in debt, with top three lenders as Valley National Bank, Sabal Capital Partners, and Parke Bank respectively. Within the portfolio, the bulk, or 47 percent of the 370,028 square feet of built space are walkup properties, with elevator properties next occupying 46 percent of the space. The bulk, or 95 percent of the built space, is in Brooklyn, with Bronx next at 5 percent of the space.

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