Joey Schwebel, Arkhouse pay $13M for industrial in Gowanus through bankruptcy

UPDATED, 1:10 p.m., January 16, 2025: Canadian-Israeli apparel manufacturer Joey Schwebel and the investment firm Arkhouse Partners through the entity Butler NY Owner LLC paid $13 million through a bankruptcy to Benjamin Akkad and Nathan Akkad through the entity 255 Butler LLC for the industrial building (F2) at 255 Butler Street in Gowanus, Brooklyn. The expected use is unknown. The joint venture assumed a $10.3 million loan as part of the acquisition.

Arkhouse Partners shares executives with Arkhouse, but they are separate entities.
The deal closed on January 8, 2025 and was recorded on January 15, 2025. The property has 99,500 square feet of built space according to a PincusCo analysis of city data. The sale price per built square foot is $130 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 property was subject to complex state and bankruptcy litigation for several years.

Owners Benjamin Akkad and Nathan Accad filed a bankruptcy petition in October 2023 in Brooklyn to halt an auction set for October 4, 2023, scheduled to satisfy a $36.2 million judgment awarded to developer Sam Boymelgreen over a 2013 ground lease at 255 Butler Street. Boymelgreen requested in court filings to make a credit bid for the property using the $36.2 million judgment. Nathan Accad’s name is also spelled Nathan Akkad in court filings, but was spelled Nathan Accad in the bankruptcy filing.

The petitioners claimed the building was worth about $30 million, but the building has secured and unsecured creditors totaling $50.5 million. The owners filed the Chapter 11 petition to halt the sale following a string of legal defeats in State Supreme Court and State Appellate Court.

According to the filing, “The filing of the instant Chapter 11 petition is the only option available to the Debtor to maintain the status quo at least in the near term. If necessary, the Debtor is prepared to sell the Property under Bankruptcy Court auction process rather than face a distressed sale scenario.”

The sale signatory for Benjamin Akkad and Nathan Akkad was Nathan Akkad. The signatory for Joey Schwebel and Arkhouse was Eric Heyman of Arkhouse. The contract date was January 8, 2025.

According to records filed with the bankruptcy, 1-23-43475, “The Settlement provides for a transfer of the Property (as defined below) to Tenant [Boymelgreen entity] or its designee (Butler NY Owner LLC) in consideration for Tenant’s agreement to fund the majority of the cash obligations due under the Plan. The Settlement was approved on December 16, 2024 [ECF No. 94], as amended on December 17, 2024 [ECF No. 96].. At its core, the Settlement provides for a transfer of the Property to Tenant in consideration for Tenant or its designee (“Plan Sponsor”) funding the discounted pay-off owed to the Senior Lender in the sum of $10,475,000 as of December 30, 2024, plus paying all accrued real estate taxes and related charges, U.S. Trustee fees, a portion of Debtor’s counsel’s allowed attorneys’ fees and other administrative expense claims.”

The senior loan held by Marvin Azrak’s Maguire Capital Group was paid $10.475 million.

Prior sales and revenue

Prior to this transaction, PincusCo has no record that the buyer Joey Schwebel had purchased any other properties and has no record it sold any properties over the past 24 months.
The seller Benjamin Akkad had not purchased any other properties and had not sold any properties over the same time period.

The property

The industrial building in Gowanus has 99,500 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 200 feet and is 200 feet deep with a total lot size of 37,500 square feet. The lot is irregular. The zoning is M1-4 which allows for up to 2 times floor area ratio (FAR) for manufacturing The city-designated market value for the property in 2022 is $12.7 million. The most recent loan totaled 0.0 and was provided by Maguire Capital Group on June 15, 2023.

Violations and lawsuits

The property was involved in one lawsuit and one bankruptcy over the past two years. The suit was a $8.3 million commercial foreclosure concerning a loan filed on April 18, 2023, by Cathay Bank against Benjamin Akkad and Nathan Accad. The bankruptcy was filed on October 3, 2023, by Benjamin Akkad and Nathan Accad citing assets of $30 million. In addition, according to city public data, the property has received two DOB violations and $9,360 in OATH penalties in the last year.

Development

On the lot, there is one active major alteration construction project, 321387085, for a 91,871 square-foot B building. The project was submitted by Sam Boymelgreen with plans filed March 15, 2019 and it has not been permitted yet.

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 2.5 times the average sales volume among other neighborhoods with $649.4 million in sales volume in the last two years and is the 6th highest in Brooklyn. For development, Gowanus has 2.5 times the average amount of major developments relative to other neighborhoods and is the 4th highest in Brooklyn. It had 2.8 million square feet of commercial and multi-family construction under development in the last two years, which represents 31 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of three of the 23 commercial properties representing 121,393 square feet of the 178,156 square feet. The largest owner is Benjamin Akkad, followed by Macarthur Holdings and then Mohamed Esa.
There are no active new building construction projects on this tax block.

The majority, or 82 percent of the 178,156 square feet of built space are industrial buildings, with retail buildings next occupying 9 percent of the space.

The seller

The PincusCo database currently indicates that Benjamin Akkad owned at least one commercial property in New York City with 99,500 square feet and a city-determined market value of $12.7 million. (Market value is typically about 50% of actual value.) The portfolio consists of at least a single industrial property. It is located in Brooklyn.

Correction: An earlier version of this post said Arkhouse provided a $10.3 million loan. In fact the joint venture including Arkhouse assumed a $10.3 million loan.

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