Naftali Group signs $238M construction loan with Bank OZK for projects in Williamsburg

Naftali Group through the entity 470 Kent Ave Associates LLC as borrower signed a construction loan with lender Bank OZK valued at $238 million for a tax parcel with three development projects totaling 551 units at 470, 480 and 490 Kent Avenue in Williamsburg, Brooklyn.
The deal closed on March 1, 2024 and was recorded on March 14, 2024. The prior lender was Bank OZK which held debt that had an original loan amount of $83 million.

Naftali Group is one of the city’s more active developers, with projects in Manhattan and Brooklyn.

The owner bought the property on May 27, 2020, for $51.2 million. The signatory for Naftali Group was Michael Naftali. The signatory for Bank OZK was John Faseler.

This is new $238 million construction loan and there remains an $83 million loan borrowed in 2022. There are three new building projects B00608389 (470 Kent Avenue, 127 units), 321599551 (490 Kent Avenue, 249 units), 321599560 (480 Kent, 175 units) filed on this tax lot, 1, and one filed on tax lot 150, which is not covered by this new debt.

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 $19,000 in ECB penalties and $19,400 in OATH penalties in the last year.

Development

On the lot, there are three active new building construction projects on the tax lot. The largest is a new building project for a 249-unit residential (R-2) building submitted by Naftali Group and filed by Michael Witek with plans filed January 5, 2021 and permitted March 2, 2023. The second largest is a new building project for a 182-unit, 380,375 square-foot R-2 building submitted by Naftali Group and filed by Michael Witek with plans filed January 5, 2021 and permitted February 28, 2023. On the tax lot, the most recent condominium plan was filed by 470 KENT AVE ASSOCIATES LLC to create 93 residential units and 1 commercial units in a building at 484 Kent Avenue in Williamsburg, Brooklyn, called Williamsburg Wharf Condominium, according to an March 23, 2023 submission to the New York State Attorney General. The principal of the sponsor, 470 KENT AVE ASSOCIATES LLC, was Michael Naftali.

The neighborhood

In Williamsburg, The bulk, or 39 percent of the 50.4 million square feet of commercial built space are elevator buildings, with walkup buildings next occupying 25 percent of the space. In sales, Williamsburg has the 4th highest sale turnover among other neighborhoods in the city with $2.2 billion in sales volume in the last two years. For development, Williamsburg has 4.4 times the average amount of major developments relative to other neighborhoods and is the 2nd highest in Brooklyn. It had 4.4 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 this tax block, PincusCo has identified the owners of seven of the nine commercial properties representing 779,082 square feet of the 779,082 square feet. The largest owner is Spitzer Enterprises, followed by Naftali Group and then City Of New York.
On the tax block, there were five new building construction projects. The largest is a 605-unit, 602,188 square-foot residential (R-2) building submitted by Spitzer Enterprises and filed by Eliot Spitzer with plans filed December 17, 2014 and permitted July 21, 2016.

The majority, or 70 percent of the 779,082 square feet of built space are elevator buildings, with development buildings next occupying 30 percent of the space.

The borrower

The PincusCo database currently indicates that Naftali Group owned at least 12 commercial properties with 371 residential units in New York City with 859,112 square feet and a city-determined market value of $171 million. (Market value is typically about 50% of actual value.) The portfolio has $961 million in debt, with top three lenders as HSBC Bank, Bank Hapoalim, and Bank OZK respectively. Within the portfolio, the bulk, or 65 percent of the 859,112 square feet of built space are elevator properties, with development properties next occupying 27 percent of the space. The bulk, or 68 percent of the built space, is in Manhattan, with Brooklyn next at 32 percent of the space.

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