Midas Hospitality signs $25.2M construction completion loan with Acres for hotel in Downtown Brooklyn

Midas Hospitality through the entity Midas Brooklyn, LLC as borrower signed a construction completion loan with lender Acres Capital through the entity Acres Loan Origination, LLC valued at $25.2 million for the hotel building (H3) at 291 Livingston Street in Downtown Brooklyn, Brooklyn.
The deal closed on March 6, 2024 and was recorded on March 18, 2024. The property has 48,495 square feet of built space according to a PincusCo analysis of city data. The loan price per built square foot is $518 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 owner bought the property on March 6, 2024, for $34.9 million. The signatory for Midas Hospitality was David G. Robert. The signatory for Acres Capital was Mark Fogel. This is a loan to complete construction at the project.

St. Louis-based Midas Hospitality, founded by J.T. Norville and David Robert, paid $34.88 million for a nearly complete Downtown Brooklyn hotel at 291 Livingston Street that Aview Equities developed that was placed into bankruptcy last summer. A bankruptcy specialist on behalf of Abraham Leifer’s Aview Equities and others placed the nearly complete 103-room hotel project valued at $29.5 million at 291 Livingston Street in Downtown Brooklyn in bankruptcy as it faced a $34 million senior loan default and at least 19 mechanic’s liens totaling approximately $3 million.

The original developer, Aview Equities, obtained a $29 million construction loan from Acres Capital in November 16, 2018, that went into default. The property fell into foreclosure and bankruptcy. Midas acquired the property out of bankruptcy with a transfer valuation of $34.9 million.

The property

The hotel building in Downtown Brooklyn has 48,495 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 20 feet and is 125 feet deep with a total lot size of 3,399 square feet. The lot is irregular. The zoning is C6-4 which allows for up to 10 times floor area ratio (FAR) for commercial and up to 10 times FAR for residential with inclusionary housing. The city-designated market value for the property in 2022 is $13.7 million.

Violations and lawsuits

The property was involved in two lawsuits and one bankruptcy over the past two years. The highest value suit was a $5.1 million commercial foreclosure concerning a loan filed on March 21, 2023, by Avraham Cohen against Aview Equities, Abraham Leifer, Eugene Weiss, and Mordechai Kohn. The bankruptcy was filed on June 2, 2023, by Aview Equities, Abraham Leifer, Eugene Weiss, Mordechai Kohn, and David Gefner citing assets of $29.5 million. In addition, according to city public data, the property has not received any significant violations in the last year.

Development

On the lot, there is one active new building construction project for a 103-unit, 39,040 square-foot R-1 building. The project was submitted by Aview Equities and filed by Abraham Leifer with plans filed May 15, 2017 and permitted July 1, 2019.

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 3.7 times the average sales volume among other neighborhoods with $1.1 billion in sales volume in the last two years and is the 3rd highest in Brooklyn. For development, Downtown Brooklyn has 2.5 times the average amount of major developments relative to other neighborhoods and is the 3rd highest in Brooklyn. It had 2.5 million square feet of commercial and multi-family construction under development in the last two years, which represents 11 percent of the neighborhood’s built space. There was one pre-foreclosure suit filed among other hotel buildings in the past 12 months.

The block

On this tax block, PincusCo has identified the owners of six of the 16 commercial properties representing 494,222 square feet of the 619,724 square feet. The largest owner is Saied Shamash, followed by Midas Hospitality and then Lonicera Partners.
On the tax block, there were six new building construction projects totaling 867,654 square feet. The largest is a 327-unit, 333,041 square-foot business (B) building submitted by Jenel Real Estate and filed by Samuel Dushey with plans filed April 20, 2016 and permitted December 14, 2017. The second largest is a 314-unit, 244,085 square-foot residential (R-2) building submitted by Lonicera Partners and filed by John Evans with plans filed September 21, 2021 and permitted May 3, 2022.

The majority, or 60 percent of the 619,724 square feet of built space are elevator buildings, with mixed-use buildings next occupying 12 percent of the space.

The borrower

The PincusCo database currently indicates that Midas Hospitality owned at least one commercial property in New York City with 48,495 square feet and a city-determined market value of $13.7 million. (Market value is typically about 50% of actual value.) The portfolio consists of at least a single hotel property. It is located in Brooklyn.

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