Michaels Organization signs $79M construction loan with Helaba in Downtown Brooklyn

Michaels Organization through the entity 111 Willoughby Owner LLC as borrower signed a new construction loan with lender Helaba through the entity Landesbank Hessen-Thuringen Girozentrale valued at $79 million for five properties including the midblock specialty building at 190 Duffield Street in Downtown Brooklyn, Brooklyn, midblock specialty building at 111 Willoughby Street in Downtown Brooklyn, Brooklyn, and two-unit mixed-use building at 115 Willoughby Street in Downtown Brooklyn, Brooklyn.
The deal closed on March 1, 2022 and was recorded on March 24, 2022.The five properties have 29,451 square feet of built space and 127,728 square feet of additional air rights for a total buildable of 157,190 square feet according to PincusCo analysis of city data. The loan price per built square foot is $2,682 and the price per buildable square foot is $502 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 Michaels Organization was Michael Flanagan.

Development

On these lots, there is one active new building construction project for a 227-unit, 176,121-square-foot R-2 building. The project was developed by Michaels Organization with applicant, company vice president Kristina Vagen with plans filed June 25, 2020 and it has not been permitted yet.

The neighborhood

In Downtown Brooklyn, the bulk, or 36 percent of the 26.8 million square feet of commercial built space are office buildings, with residential elevator buildings next occupying 29 percent of the space. In sales, Downtown Brooklyn has 1.3 times the average sales volume among other neighborhoods with $365.7 million in sales volume in the last two years and is the 10th highest in Brooklyn. For development, Downtown Brooklyn has 2.9 times the average amount of major developments relative to other neighborhoods and is the 7th highest in Brooklyn. It had 2.6 million square feet of commercial and multi-family construction under development in the last two years, which represents 10 percent of the neighborhood’s built space.

The block

On the tax block of 190 Duffield Street, PincusCo has identified the owners of one of the 19 commercial properties representing 2,736 square feet of the 520,683 square feet. The identified owner is Michaels Organization. There is one active new building construction project totaling 176,121 square feet. It is a 227-unit, 176,121-square-foot R-2 building developed by Kristina Vagen with plans filed June 25, 2020 and it has not been permitted yet.

The majority, or 94 percent of the 497,913 square feet of built space are office buildings, with specialty buildings next occupying 5 percent of the space.

Surrounding

Within a 400-foot radius of 190 Duffield Street, Pincusco identified five commercial real estate items of interests occurred over the past 24 months.
Of those five items, one was in new building development. It was a new building permit application filed on June 25, 2020 for a 176,121-square-foot R-2 building with 227 residential units at 111 Willoughby Street.
Of those five items, two were sales above $5 million totaling $30 million. The most recent of the two was United American Land which bought the 60,500-square-foot, one-unit industrial (W2) on 80 Willoughby Street for $23.2 million from Sisters of St. Joseph on March 5, 2021.
Of those five items, two were loans above $5 million totaling $46.2 million. The most recent of the two was Albert Srour which borrowed $21 million from Signature Bank secured by the 73,860-square-foot, one-unit office building (O6) on 81 Willoughby Street on September 10, 2021.

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