Madison Realty Capital acquires bankrupt Greenpoint dev site with $28M loan from Bo Jin Zhu

Madison Realty Capital through the entity Dupont Street Owner 2 LLC acquired from Bo Jin Zhu through the entity Dupont Street Developers LLC the development site including the industrial building (F1) at 22 Clay Street in Greenpoint, Brooklyn, industrial building (F4) at 93 Dupont Street in Greenpoint, Brooklyn, and industrial building (F1) at 32 Clay Street in Greenpoint, Brooklyn.
Madison Realty Capital was the lender on the site, having provided a $28 million loan in 2017. Bo Jin Zhu placed the parcels in bankruptcy in March 2021.
The deal closed on October 19, 2022 and was recorded on November 9, 2022.The five properties have 55,760 square feet of built space and 78,290 square feet of additional air rights for a total buildable of 134,000 square feet according to PincusCo analysis of city data. The sale price per built square foot is $502 and the price per buildable square foot is $208 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 signatory for Bo Jin Zhu was Bo Jin Zhu. The signatory for Madison Realty Capital was David Speiser. Bo Jin Zhu, who placed the property in bankruptcy, sold for no consideration the development site to the lender Madison Realty Capital, which had provided a $28 million loan in 2017.

Because multiple properties have been transacted, some of the following sections will follow the property with the largest assessed value, which in this case, is the property on 22 Clay Street.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer Madison Realty Capital purchased 17 properties in 17 transactions for a total of $166.6 million and sold eight properties in six transactions for a total of $86.2 million over the past 24 months.
The seller Bo Jin Zhu had not purchased any other properties and had not sold any properties over the same time period. The five properties with a total of 55,760 square feet of built space generated revenue of $1 million per year or $18 per square foot. The sale price per square foot was $502.

The property

The 22 Clay Street parcel has frontage of 50 feet and is 200 feet deep with a total lot size of 23,000 square feet. The lot is irregular. The zoning is M1-2/R6A which allows for up to 2 times floor area ratio (FAR) for manufacturing and up to 3 times FAR for residential with inclusionary housing. The city-designated market value for the property in 2022 is $2.2 million.

Violations and lawsuits

Bo Jin Zhu placed the site 1-21-40664-ess in bankruptcy in March 2021. In addition, according to city public data, the properties have received two DOB violations and $4,800 in OATH penalties in the last year.

Development

On these lots, there are three active new building construction projects and major alteration projects with initial costs more than $5 million, totaling 270,639 square feet. The largest is a new building project for a 186-unit, 142,096 square-foot R-2 building developed by Yoel Schwimmer with plans filed July 18, 2018 and it has not been permitted yet. The second largest is a new building project for a 139-unit, 102,159 square-foot R-2 building developed by Yoel Schwimmer with plans filed July 18, 2018 and it has not been permitted yet.

The neighborhood

In Greenpoint, the bulk, or 29 percent of the 23.4 million square feet of commercial built space are walkup buildings, with industrial buildings next occupying 27 percent of the space. In sales, Greenpoint has 1.9 times the average sales volume among other neighborhoods with $641.4 million in sales volume in the last two years and is the 7th highest in Brooklyn. For development, Greenpoint has 3.2 times the average amount of major developments relative to other neighborhoods and is the 6th highest in Brooklyn. It had 3.3 million square feet of commercial and multi-family construction under development in the last two years, which represents 14 percent of the neighborhood’s built space.

The block

On the tax block of 22 Clay Street, PincusCo has identified the owners of 20 of the 23 commercial properties representing 188,135 square feet of the 197,431 square feet. The largest owner is Bo Jin Zhu, followed by Sela Group and then Leszek Dudzinski.
On the tax block, there were three new building construction projects totaling 270,639 square feet. The largest is a 186-unit, 142,096-square-foot R-2 building developed by Yoel Schwimmer with plans filed July 18, 2018 and permitted April 28, 2022. The second largest is a 139-unit, 102,159-square-foot R-2 building developed by Yoel Schwimmer with plans filed July 18, 2018 and permitted May 2, 2022.

The majority, or 62 percent of the 197,431 square feet of built space are industrial buildings, with hotel buildings next occupying 18 percent of the space.

The seller

The PincusCo database currently indicates that Bo Jin Zhu owned at least 10 commercial properties in New York City with 122,835 square feet and a city-determined market value of $8.2 million. (Market value is typically about 50% of actual value.) Within the portfolio, all identified are industrial properties. They are all located in Brooklyn.

The buyer

The PincusCo database currently indicates that Madison Realty Capital owned at least 65 commercial properties in New York City with 2,247,082 square feet. The portfolio has $658 million in debt, with top three lenders as Signature Bank, Athene Annuity And Life Company, and Citibank respectively. Within the portfolio, the bulk, or 58 percent of the 2,247,082 square feet of built space are elevator properties, with walkup properties next occupying 16 percent of the space. The bulk, or 37 percent of the built space, is in Manhattan, with Brooklyn next at 30 percent of the space.

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