Maheshchand Ratanji pays $9.2M for formerly foreclosed hotel in Gowanus

Maheshchand Ratanji through the entity Essence Hotel LLC paid $9.2 million to the former lender, a securitized trust through the entity Dbjpm 2017-C6 611 Degraw LLC, for the hotel building (H3) at 611 Degraw Street in Gowanus, Brooklyn. This was a real estate owned transaction and the expected use is cash flowing.
The deal closed on August 15, 2024 and was recorded on August 22, 2024. The property has 12,625 square feet of built space according to a PincusCo analysis of city data. The sale price per built square foot is $728 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 seller took the property back from the former borrower on November 22, 2023, in a transaction valued at $8 million through the foreclosure auction under index number 520542/2022. The signatory for Series 2017-C6 was Matthew Furay. The signatory for Maheshchand M. Ratanji was Maheshchand M. Ratanji. The contract date was August 15, 2024. The seller is the former lender which took the property back in a foreclosure.

The former owner was Alec Shtromandel. Alec Shtromandel borrowed $7 million from Deutsche Bank in 2017. Matthew Furay is with K-Star Asset Management, a special servicer.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer Maheshchand M. Ratanji purchased two properties in two transactions for a total of $9.6 million and has no record it sold any properties over the past 24 months.
The seller Series 2017-C6 had not purchased any other properties and had not sold any properties over the same time period. The former owners according to the Department of Housing Preservation and Development includes Alec Shtromandel, individual owner and Alce Shtromandel, site manager.

The property

The hotel building in Gowanus has 12,625 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 50 feet and is 100 feet deep with a total lot size of 5,016 square feet. 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 $3.1 million. The most recent loan totaled 0.0 and was provided by Dbjpm 2017-C6 611 Degraw LLC on September 25, 2023.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the property for the past 24 months. In addition, according to city public data, the property has received $1,280 in ECB penalties and $3,280 in OATH penalties in the last year.

Development

For the tax lot building, it received its initial certificate of occupancy on August 30, 2012. There are no active new building construction projects or major alteration projects with initial costs more than $1 million on this tax lot.

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 2.4 times the average sales volume among other neighborhoods with $626.2 million in sales volume in the last two years and is the 7th highest in Brooklyn. For development, Gowanus has 2.8 times the average amount of major developments relative to other neighborhoods and is the 4th highest in Brooklyn. It had 3 million square feet of commercial and multi-family construction under development in the last two years, which represents 33 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of five of the 17 commercial properties representing 64,473 square feet of the 164,252 square feet. The largest owner is Jack Elo, followed by Dbjpm 2017-C6 611 Degraw Llc and then Artimus.
On the tax block, there were two new building construction projects totaling 128,811 square feet. The largest is a 140-unit, 114,431 square-foot residential (R-2) building submitted by Roee Wiczyk with plans filed November 22, 2021 and permitted April 27, 2022. The second largest is a eight-unit, 14,379 square-foot residential (R-2) building submitted by Canal Development Partners and filed by William Bomar with plans filed February 27, 2024 and it has not been permitted yet.

The majority, or 44 percent of the 164,252 square feet of built space are industrial buildings, with retail buildings next occupying 31 percent of the space.

The buyer

The PincusCo database currently indicates that Maheshchand M. Ratanji owned at least 18 commercial properties with 105 residential units in New York City with 355,464 square feet and a city-determined market value of $57.6 million. (Market value is typically about 50% of actual value.) The portfolio has $179.7 million in debt, with top three lenders as State Bank of Texas, Webster Bank, and PCSB Bank respectively. Within the portfolio, the bulk, or 91 percent of the 355,464 square feet of built space are hotel properties, with H3 properties next occupying 4 percent of the space. The bulk, or 57 percent of the built space, is in Brooklyn, with Bronx next at 31 percent of the space.

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