Monadnock Development signs $107.9M construction loan in East New York

Monadnock Development through the entity Nehemiah Spring Creek 4C Housing Development Fund as borrower signed a new construction loan with lender NYC Housing Development Corporation valued at $107.9 million for 30 properties including the specialty building (Q9) at 414 Vandalia Avenue in East New York, Brooklyn, specialty building (Q9) at 71 Gateway Drive in East New York, Brooklyn, and property at 461 Vandalia Avenue in East New York Brooklyn.
The deal closed on December 22, 2022 and was recorded on January 6, 2023.
The signatory for Monadnock Development was Nicholas Lembo. The signatory for NYC Housing Development Corporation was Lauren Connors.

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 414 Vandalia Avenue.

The property

The 414 Vandalia Avenue parcel has frontage of zero feet and is zero feet deep with a total lot size of 5,792 square feet. The zoning is R6 which allows for up to 2.43 times floor area ratio (FAR) for residential. The city-designated market value for the property in 2022 is $436,000.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the properties since September of 2020. In addition, according to city public data, the properties have not received any significant violations in the last year.

Development

For the tax lot buildings, one out of the 30 buildings received a initial certificate of occupancy in the last ten years. On these lots, there are 30 active new building construction projects and major alteration projects with initial costs more than $5 million, totaling 211,573 square feet. The largest is a new building project for a eight-unit, 9,060 square-foot R-2 building developed by the New York City Department of Housing
Preservation and Development’s Rona Reodica with plans filed September 3, 2019 and permitted December 20, 2022. The second largest is a new building project for a eight-unit, 9,060 square-foot R-2 building developed by Rona Reodica with plans filed September 3, 2019 and permitted December 20, 2022.

The neighborhood

In East New York, the bulk, or 41 percent of the 44.6 million square feet of commercial built space are elevator buildings, with industrial buildings next occupying 21 percent of the space. In sales, East New York has 2.4 times the average sales volume among other neighborhoods with $847.4 million in sales volume in the last two years and is the 4th highest in Brooklyn. For development, East New York has 3.9 times the average amount of major developments relative to other neighborhoods and is the 3rd highest in Brooklyn. It had 4 million square feet of commercial and multi-family construction under development in the last two years, which represents 9 percent of the neighborhood’s built space.

The block

On the tax block of 414 Vandalia Avenue, PincusCo has identified the owners of 39 of the 106 commercial properties representing 8,722,579 square feet of the 10,090,491 square feet. The largest owner is Rockpoint Group, followed by Related Companies and then NYC Department of Education.
On the tax block, there were 32 new building construction projects totaling 219,735 square feet. The largest is an eight-unit, 9,060-square-foot R-2 building developed by Rona Reodica with plans filed September 3, 2019 and permitted December 20, 2022. The second largest is a eight-unit, 9,060-square-foot R-2 building developed by Rona Reodica with plans filed September 3, 2019 and permitted December 20, 2022.

The majority, or 63 percent of the 9.8 million square feet of built space are elevator buildings, with industrial buildings next occupying 15 percent of the space.

The borrower

The PincusCo database currently indicates that Monadnock Development owned at least 51 commercial properties in New York City with 1,890,442 square feet and a city-determined market value of $228.8 million. (Market value is typically about 50% of actual value.) The portfolio has $538.3 million in debt, with top three lenders as New York City Housing Authority, NYC Housing Development Corporation, and Wells Fargo respectively. Within the portfolio, the bulk, or 69 percent of the 1,890,442 square feet of built space are elevator properties, with walkup properties next occupying 23 percent of the space. The bulk, or 92 percent of the built space, is in Manhattan, with Bronx next at 7 percent of the space.

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