Madison Realty Capital signs $40M refi for dev site in Greenpoint

Madison Realty Capital through the entity Dupont Street Owner 2 LLC as borrower signed a refi loan with lender Maxim Capital Group through the entity Maxim Credit Group, LLC valued at $40 million for two development properties including the development parcel (V1) at 65 Dupont Street in Greenpoint, Brooklyn and development parcel (V1) at 75 Dupont Street in Greenpoint, Brooklyn.

On these lots, there are two active new building construction projects and major alteration projects with initial costs more than $5 million, totaling 244,255 square feet. The largest is a new building project for a 186-unit, 142,096 square-foot R-2 building submitted by Yoel Schwimmer and filed by Yoel Schwimmer with plans filed July 18, 2018 and permitted June 26, 2023. The second largest is a new building project for a 139-unit, 102,159 square-foot R-2 building submitted by Yoel Schwimmer and filed by Yoel Schwimmer with plans filed July 18, 2018 and permitted January 3, 2023.

The deal closed on July 21, 2023 and was recorded on July 31, 2023. The prior lender was RWN Management which held debt that had an original loan amount of $28 million.
The two properties have 32,360 square feet of built space and 51,626 square feet of additional air rights for a total buildable of 83,994 square feet according to a PincusCo analysis of city data. The loan price per built square foot is $1,236 and the price per buildable square foot is $476 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 Madison Realty Capital was Brian Shatz. The signatory for Maxim Capital Group was Eric Chan. Bo Jin Zhu, who placed the property in bankruptcy, turned over for no consideration the development site to the lender Madison Realty Capital, which had provided a $28 million loan in 2017. That transfer closed on October 19, 2022 and was recorded on November 9, 2022, as PincusCo reported at the time.

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 65 Dupont Street.

Prior sales and revenue

The two properties with a total of 32,360 square feet of built space generated revenue of $564,609 per year or $17 per square foot.

The property

The development building in Greenpoint has 32,360 square feet of built space and 51,626 square feet of additional air rights for a total buildable of 83,994 square feet according to a PincusCo analysis of city data. The parcel has frontage of 50 feet and is 200 feet deep with a total lot size of 22,999 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 $2.7 million. The most recent loan totaled $28 million and was provided by RWN Management on October 19, 2022.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the properties for the past 24 months. In addition, according to city public data, the properties have received $12,500 in ECB penalties in the last year.

The neighborhood

In Greenpoint, The bulk, or 29 percent of the 23.7 million square feet of commercial built space are walkup buildings, with industrial buildings next occupying 25 percent of the space. In sales, Greenpoint has 2 times the average sales volume among other neighborhoods with $706.9 million in sales volume in the last two years and is the 7th highest in Brooklyn. For development, Greenpoint has 2.1 times the average amount of major developments relative to other neighborhoods and is the 9th highest in Brooklyn. It had 2.1 million square feet of commercial and multi-family construction under development in the last two years, which represents 9 percent of the neighborhood’s built space.

The block

On the tax block of 65 Dupont 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 Yehuda Yaloz, followed by Watermark Capital Group and then Steve Goldman (230 Java).
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 residential (R-2) building submitted by Yoel Schwimmer and filed 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 residential (R-2) building submitted by Yoel Schwimmer and filed by Yoel Schwimmer with plans filed July 18, 2018 and permitted January 3, 2023.

The majority, or 34 percent of the 197,431 square feet of built space are industrial buildings, with development buildings next occupying 28 percent of the space.

The borrower

The PincusCo database currently indicates that Madison Realty Capital owned at least 62 commercial properties with 2,652 residential units in New York City with 2,706,910 square feet and a city-determined market value of $375.4 million. (Market value is typically about 50% of actual value.) The portfolio has $959.1 million in debt, with top three lenders as Signature Bank, Athene Annuity And Life Company, and FTLP LLC respectively. Within the portfolio, the bulk, or 77 percent of the 2,706,910 square feet of built space are elevator properties, with walkup properties next occupying 13 percent of the space. The bulk, or 36 percent of the built space, is in Queens, with Brooklyn next at 33 percent of the space.

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