Leser Group signs $201.9M construction loan for 345K sf project in Cypress Hills
1495 Herkimer Street (Credit - Google)
Leser Group through the entity 2440 Holdings LLC as borrower signed a new construction loan with lender UMB Bank valued at $201.9 million for the specialty building (W9) at 1495 Herkimer Street in Cypress Hills, Brooklyn.
The deal closed on June 3, 2022 and was recorded on July 7, 2022. The prior lender was Metropolitan Commercial Bank which held debt that had an original loan amount of $33.6 million.The property has 110,000 square feet of built space and 215,450 square feet of additional air rights for a total buildable of 325,500 square feet according to PincusCo analysis of city data. The loan price per built square foot is $1,835 and the price per buildable square foot is $620 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 June 23, 2015, for $33 million. The signatory for Leser Group was Abraham Leser. The signatory for UMB Bank was Dillon Butler. Abraham Leser is the founder and principal of Leser Group. https://therealdeal.com/new-research/topics/people/abraham-leser/
The property
The 1495 Herkimer Street parcel has frontage of 200 feet and is 400 feet deep with a total lot size of 77,500 square feet. The lot is irregular. The zoning is C4-5D which allows for up to 4.2 times floor area ratio (FAR) for commercial and up to 4.2 times FAR for residential with inclusionary housing. The most recent loan totaled $33.6 million and was provided by Metropolitan Commercial Bank on April 13, 2021.
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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 not received any significant violations in the last year.
Development
On these lots, there is one active new building construction project for a 325,437-square-foot M building. The project was developed by Benny Beniaker of the Leser Group with plans filed April 3, 2020 and it has not been permitted yet.
The neighborhood
In Cypress Hills, the bulk, or 26 percent of the 9.2 million square feet of commercial built space are specialty buildings, with mixed-use buildings next occupying 22 percent of the space. In sales, Cypress Hills has the 37th highest sale turnover among other neighborhoods in Brooklyn with $59.5 million in sales volume in the last two years. For development, Cypress Hills has had very little major development activity relative to other neighborhoods.It had 461,083 square feet of commercial and multi-family construction under development in the last two years, which represents 5 percent of the neighborhood’s built space.
The block
On this tax block, PincusCo has identified the owners of one of the six commercial properties representing 110,000 square feet of the 147,448 square feet. The identified owner is Leser Group. There is one active new building construction project totaling 325,437 square feet.
The majority, or 75 percent of the 147,448 square feet of built space are specialty buildings, with industrial buildings next occupying 20 percent of the space.
The borrower
The PincusCo database currently indicates that Leser Group owned at least 33 commercial properties with 1,064,566 square feet and a city-determined market value of $113.7 million. (Market value is typically about 50% of actual value.) The portfolio has $535.5 million in debt, with top three lenders as UMB Bank, Tel Aviv Stock Exchange bondholders, and Axos Bank respectively. Within the portfolio, the bulk, or 43 percent of the 1,064,566 square feet of built space are elevator properties, with specialty properties next occupying 32 percent of the space. The bulk, or 69 percent of the built space, is in Brooklyn, with Bronx next at 31 percent of the space.
Surrounding
Within a 400-foot radius of 1495 Herkimer Street, PincusCo identified one commercial real estate item of interests occurred over the past 24 months.
It was a loan which Leser Group borrowed $6.5 million from Signature Bank secured by the 20,083-square-foot, two-unit industrial (F5) on 1508 Herkimer Street on July 12, 2021.
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