Loketch Group, partners sign $90M construction loan with Scale Lending for 274-unit development in Williamsburg

The Loketch Group along with partners Joyland Group, and Meral Property Group through the entity 555 Broadway LLC as borrower signed a new construction loan with lender Scale Lending, a division of Slate Property Group, through the entity Scale Lorimer Lender LLC valued at $90 million for the development project at 555 Broadway, also known as 275 Lorimer Street in Williamsburg, Brooklyn.
Loketch Group, the Joyland Group and Meral Property Group, on January 25, filed a permit https://www.pincusco.com/loketch-joyland-meral-file-plans-for-274-unit-mixed-use-building-in-williamsburg/, 203,489-square-foot mixed-use building at 275 Lorimer Street in Williamsburg, Brooklyn. The site has an alternate address of 555 Broadway. Jack Wolcowitz of Hamilton Eastman, an asset management firm, was the one to formally file the permit application. The Joyland Group is the real estate arm of Hamilton Eastman.

The joint venture reportedly just purchased the development site for $54 million from bankrupt co-living company The Collective, which is based in London. According to the report, the sale was made by the Collective to avoid foreclosure on the site.

The deal closed on November 30, 2022 and was recorded on December 6, 2022.
The owner bought the property on January 25, 2022, for $53.9 million. The signatory for Loketch Group, Joyland Group, and Meral Property Group was Pinchos Loketch.

The property

The 275 Lorimer Street parcel has frontage of 316 feet and is 195 feet deep with a total lot size of 45,129 square feet. The lot is irregular. The zoning is C4-4 which allows for up to 3.4 times floor area ratio (FAR) for commercial and up to 3.44 times FAR for residential. The city-designated market value for the property in 2022 is $3.6 million.The most recent loan totaled $47 million and was provided by Slate Property Group on January 25, 2022.

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 $17,500 in ECB penalties and $17,500 in OATH penalties in the last year.

Development

On the lot, there is a new building project for a 551-unit, 296,367 square-foot R-2 building developed by Simon Koster with plans filed June 27, 2019 and it has not been permitted yet.

The neighborhood

In Williamsburg, the bulk, or 39 percent of the 50 million square feet of commercial built space are elevator buildings, with walkup buildings next occupying 25 percent of the space. In sales, Williamsburg has the 6th highest sale turnover among other neighborhoods in the city with $2.1 billion in sales volume in the last two years. For development, Williamsburg is the 7th most active neighborhood among other neighborhoods. It had 5 million square feet of commercial and multi-family construction under development in the last two years, which represents 10 percent of the neighborhood’s built space. There was one pre-foreclosure suit filed among other development buildings in the past 12 months.

The block

On this tax block, PincusCo has identified the owners of one of the three commercial properties representing zero square feet of the 54,448 square feet. The identified owner is Loketch Group.
On the tax block, there were three new building construction projects totaling 783,587 square feet. The largest is a 551-unit, 296,367-square-foot R-2 building developed by Simon Koster with plans filed June 27, 2019 and permitted June 3, 2022. The second largest is a 226-unit, 283,731-square-foot R-2 building developed by Jason Buchheit with plans filed November 22, 2016 and it has not been permitted yet.

the majority, or 100 percent of the 52,648 square feet of built space are office buildings, with development buildings next occupying 0 percent of the space.

The borrower

The PincusCo database currently indicates that Loketch Group owned at least 15 commercial properties in New York City with 268,102 square feet and a city-determined market value of $33.6 million. (Market value is typically about 50% of actual value.) The portfolio has $133.3 million in debt, with top three lenders as Societe Generale, Maxim Capital Group, and BridgeCity Capital respectively. Within the portfolio, the bulk, or 56 percent of the 268,102 square feet of built space are elevator properties, with D1 properties next occupying 21 percent of the space. They are all located in Brooklyn.
The PincusCo database currently indicates that Joyland Group owned at least two commercial properties in New York City with 65,181 square feet and a city-determined market value of $11.1 million. (Market value is typically about 50% of actual value.) The portfolio has $10.8 million in debt, borrowed from Sterling National Bank. Within the portfolio, the bulk, or 100 percent of the 65,181 square feet of built space are office properties, with development properties next occupying 0 percent of the space. They are all located in Bronx.

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