Israel’s LENY Group places Williamsburg rental with $69M in debt in bankruptcy

The Israel-based real estate investment firm LENY Group placed the 101,358-square-foot, 40-unit, mixed-use loft building at 190 Berry Street in Williamsburg, Brooklyn into bankruptcy protection to halt a UCC sale tied to a default in $69.8 million of senior debt. LENY Group is led  by Rudy Gabsi, and owns the property through the entity LENY Berry Holdings LLC.

LENY Group filed the petition through the entity LENY Berry Mezz LLC in U.S. Bankruptcy Court in Brooklyn on April 4, 2024, to halt the foreclosure auction noticed by lender Waterfall Asset Management’s entity WF CREL 2020 LLC scheduled for 11 a.m. that same day.

Case 1-24-41452-ess LINK

LENY 190 Berry bankruptcy narrative pdf

The LENY Group, which also was known by the names LENY Equities (in the United States) and LENY, had acquired control of the property by September 2016, when it borrowed $82 million from Deutsche Bank. In December 2020, Deutsche Bank assigned the debt to the Waterfall Asset Management entity.

An Eastdil Secured team including Will Silverman was marketing the property for the UCC sale.

According to the marketing material, “In 2009, the Property was converted from separate commercial warehouses to residential and retail use. Today, the connected properties are comprised of authentic brick & beam loft apartments and desirable ground floor retail spaces, including the famous Radegast Hall & Biergarten… The Property benefits from a J-51 tax abatement that expires in 2025. In-place rents are below market and offer an opportunity to unlock the upside of Williamsburg’s multifamily market dynamics.”

The building in an M1-2/R6A zone, was constructed in 1887, and most recently renovated in 2009.

The property has 36,000 square feet of retail, according to the owner website.

The signatory for the bankruptcy filing was Ephraim Diamond of Arbel Capital Advisors, a bankruptcy and restructuring advisory firm.

According to the bankruptcy filing, “Although the owner is currently unable to pay all mortgage arrears and debt service in full each month, the Property retains the ability to regain enhanced value based upon the leasing of vacant commercial space, plus anticipated increased rental income beginning in 2025 after various tax abatements expire. Currently the the [sic] Property’s rent roll is approximately $400,000 per month and can increase significantly… The UCC foreclosure sale was noticed in connection with a default under the senior mortgage loan which carries a current principal balance of approximately $69.8 million.”

The owner

The business entities with the Department of Housing Preservation and Development are Waterstone Group LLC and Leny Berry Holdings LLC.

The surrounding

Within a 400-foot radius of 188 Berry Street, PincusCo identified seven commercial real estate items of interests occurred over the past 24 months. Of those seven items, two were sales above $5 million totaling $21.8 million. The most recent of the two was Creas Inc. which bought the 6,500-square-foot, eight-unit rental (C1) on 117 North 4th Street for $9.8 million from Wharton Properties on September 22, 2023. Of those seven items, five were loans above $5 million totaling $183.7 million. The most recent of the five was Hudson Companies in which borrowed $28.2 million from Voya Investment Management secured by five condo units in the 41,387-square-foot, 78-unit mixed-use building (RM) on 94 North 3rd Street on December 4, 2023.

Correction: A prior version of this post incorrectly identified Oded Norman as an executive with LENY Group, but in fact he left the company in mid-2022.

Direct link to the property’s ACRIS.