Joel Schwartz signs $7.9M refi with Quanta for 13-unit project in Williamsburg

Joel Schwartz through the entity 438 Union Ave LLC as borrower signed a refi loan with lender Quanta Finance valued at $7.9 million for the midblock development building at 438 Union Avenue in Williamsburg, Brooklyn.
The deal closed on April 15, 2022 and was recorded on April 30, 2022.

The property has zero square feet of built space and 10,716 square feet of additional air rights for a total buildable of 10,716 square feet according to PincusCo analysis of city data. The loan price per buildable square foot is $737 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 May 8, 2019, for $3.1 million. The signatory for Joel Schwartz was Joel Schwartz. The signatory for Quanta Finance was Matthew Zafrin. This adds $2.8 million in new debt.

The property

The 438 Union Avenue parcel has frontage of 25 feet and is 107 feet deep with a total lot size of 2,679 square feet. The zoning is R7A which allows for up to 4 times floor area ratio (FAR) for residential with inclusionary housing. The city-designated market value for the property in 2022 is $321,000.

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 $49,900 in ECB penalties and $53,500 in OATH penalties in the last year.

Development

On these lots, there is one active new building construction project for a 13-unit, 9,226-square-foot R-2 building. The project was developed by Joel Schwartz with plans filed September 25, 2018 and permitted November 17, 2021.

The neighborhood

In Williamsburg, the bulk, or 35 percent of the 65.1 million square feet of commercial built space are residential elevator buildings, with residential walkup buildings next occupying 19 percent of the space. In sales, Williamsburg has the 9th highest sale turnover among other neighborhoods in the city with $1.4 billion in sales volume in the last two years. For development, Williamsburg is the 6th most active neighborhood among other neighborhoods. It had 5.1 million square feet of commercial and multi-family construction under development in the last two years, which represents 8 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of eight of the 27 commercial properties representing 66,070 square feet of the 146,737 square feet. The largest owner is Manjula Mukahopadhyay, followed by Maria Dente and then Ki Sung Park. There are two active new building construction projects totaling 18,875 square feet. The largest is a four-unit, 9,649-square-foot R-2 building developed by Michael Maidan with plans filed April 24, 2015 and permitted March 5, 2020. The second largest is a 13-unit, 9,226-square-foot R-2 building developed by Joel Schwartz with plans filed September 25, 2018 and permitted November 17, 2021.

The majority, or 35 percent of the 206,628 square feet of built space are residential walkup buildings, with mixed-use buildings next occupying 26 percent of the space.

The borrower

The PincusCo database, which is incomplete, currently indicates that Joel Schwartz owned at least 42 commercial properties with 228,161 square feet and a city-determined market value of $36.3 million. (Market value is typically about 50% of actual value.) The portfolio has $450.2 million in debt, with top three lenders as Citibank, BridgeCity Capital, and Customers Bank respectively. Within the portfolio, the bulk, or 28 percent of the 228,161 square feet of built space are industrial properties, with residential elevator properties next occupying 23 percent of the space. They are all located in Brooklyn.

Surrounding

Within a 400-foot radius of 438 Union Avenue, PincusCo identified four commercial real estate items of interests occurred over the past 24 months.
Of those four items, one was for major renovation including a certificate of occupancy change. It was a permit issued on September 29, 2020 for the $1.3 million renovation of 8,704-square-foot R-2 building with eight residential units at 42 Devoe Street.
Of those four items, three were loans above $5 million totaling $36.2 million. The most recent of the three was Mendel Jacobowitz which borrowed $10.5 million from Webster Bank secured by the 17,152-square-foot, 13-unit rental (C1) on 471 Keap Street and two other properties on February 16, 2022.

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