Maguire Capital Group buys $11M note in foreclosure secured by industrial in Gowanus
Maguire Capital Group through the entity Maguire Butler LLC bought a note with an original principal of $11 million from Cathay Bank secured by the Akkad family’s industrial building (F2) at 255 Butler Street in Gowanus, Brooklyn.
Cathay Bank filed to foreclose on the loan in April 2023, and now Maguire Capital is continuing the foreclosure action. 511468/2023
The loan sale closed on June 15, 2023 and was recorded on June 21, 2023. The prior lender was Cathay Bank which held debt that had an original loan amount of $11 million.
The property has 99,500 square feet of built space according to a PincusCo analysis of city data.
The owner bought the property on July 1, 2022, for $6.5 million. The signatory for Benjamin Akkad was Benjamin Akkad.
PincusCo previously reported on the property when Cathay Bank filed the pre-foreclosure action weeks after Sam Boymelgreen won a $36 million judgment against the Akkads. The Akkad family’s 255 Butler LLC as landlord signed a 49-year ground lease with Sam Boymelgreen in March 2013, valued at $7 million. Boymelgreen sought to bring WeWork to the building, but, according to The Real Deal, the Akkads wanted to cut him out of the deal, and years of litigation ensued resulting last month in a $36 million award to Boymelgreen.
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.
Violations and lawsuits
The property was involved in one lawsuit and zero bankruptcies 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 Akkad. In addition, according to city public data, the property has received 12 DOB violations, $26,250 in ECB penalties, and $36,150 in OATH penalties in the last year.
Development
On the lot, there are two active new building construction projects and major alteration projects with initial costs more than $5 million, totaling 2,936 square feet. The largest is a major alteration project for a 91,871 square-foot B building submitted by Sam Boymelgreen with plans filed March 15, 2019 and it has not been permitted yet. The second largest is a major alteration project for a 162-unit, 93,745 square-foot R-1 building submitted by Sam Boymelgreen with plans filed December 9, 2014 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 1.7 times the average sales volume among other neighborhoods with $593.2 million in sales volume in the last two years and is the 8th highest in Brooklyn. For development, Gowanus is the 6th most active neighborhood among other neighborhoods. It had 4.6 million square feet of commercial and multi-family construction under development in the last two years, which represents 50 percent of the neighborhood’s built space. There were two pre-foreclosure suit filed among other industrial buildings in the past 12 months.
The block
On this tax block, PincusCo has identified the owners of two of the 23 commercial properties representing 21,893 square feet of the 178,156 square feet. The two identified owners are Mohamed Esa and MacArthur Holdings.
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.
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