Michael Chera signs $14M refi with Webster Bank for three properties in Brooklyn

Michael Chera through the entity 908 Church LLC as borrower signed a refi loan with lender Webster Bank valued at $14 million for three properties including the retail building (K4) at 523 Fulton Street and the mixed-use building (K4) at 405 Fulton Street in Downtown Brooklyn, and the retail building (K1) at 892 Flatbush Avenue in Flatbush, Brooklyn.
The deal closed on August 17, 2023 and was recorded on September 5, 2023. The three properties have 136,730 square feet of built space and 256,390 square feet of additional air rights for a total buildable of 393,270 square feet according to a PincusCo analysis of city data. The loan price per built square foot is $102 and the price per buildable square foot is $35 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 Michael Chera was Michael Chera.

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 523 Fulton Street.

Prior sales and revenue

Out of the three properties, two with a total of 136,730 square feet of built space generated revenue of $2 million per year.

The property

The retail building in Downtown Brooklyn has 136,730 square feet of built space and 256,390 square feet of additional air rights for a total buildable of 393,270 square feet according to a PincusCo analysis of city data. The parcel has frontage of 195 feet and is 115 feet deep with a total lot size of 28,042 square feet. The lot is irregular. The zoning is C6-4.5 which allows for up to 12 times floor area ratio (FAR) for commercial The city-designated market value for the property in 2022 is $30.1 million. The most recent loan totaled $12.8 million and was provided by Webster Bank on May 3, 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 three DOB violations, $12,300 in ECB penalties, and $19,350 in OATH penalties in the last year.

Development

For the tax lot buildings, one out of the three buildings received a initial certificate of occupancy in the last ten years. 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 Downtown Brooklyn, The bulk, or 40 percent of the 22.4 million square feet of commercial built space are office buildings, with elevator buildings next occupying 24 percent of the space. In sales, Downtown Brooklyn has 3.8 times the average sales volume among other neighborhoods with $1.4 billion in sales volume in the last two years and is the 2nd highest in Brooklyn. For development, Downtown Brooklyn has 3.6 times the average amount of major developments relative to other neighborhoods and is the 4th highest in Brooklyn. It had 3.6 million square feet of commercial and multi-family construction under development in the last two years, which represents 16 percent of the neighborhood’s built space.

The block

On the tax block of 523 Fulton Street, PincusCo has identified the owners of three of the seven commercial properties representing 262,607 square feet of the 684,181 square feet. The largest owner is Webster Apartments, followed by Daniel Gazal and then Allied Property Group.
On the tax block, there were five new building construction projects totaling 731,724 square feet. The largest is a 387,801 square-foot business (B) building submitted by JEMB Realty and filed by Morris Jerome with plans filed September 20, 2017 and permitted February 13, 2018. The second largest is a 248-unit, 232,375 square-foot residential (R-2) building submitted by JEMB Realty and filed by Morris Bailey with plans filed September 25, 2014 and it has not been permitted yet.

The majority, or 58 percent of the 684,181 square feet of built space are office buildings, with retail buildings next occupying 20 percent of the space.

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