Naftali Group signs $46.7M refi loan with Israel Discount Bank for dev site in Williamsburg

Naftali Group through the entity 470 Kent Ave Associates II LLC as borrower signed a refi loan with lender Israel Discount Bank through the entity Israel Discount Bank Of New York valued at $46.7 million for the industrial building (F5) at 470 Kent Avenue in Williamsburg, Brooklyn.
The deal closed on January 12, 2023 and was recorded on January 19, 2023.
The owner bought the property on May 27, 2020, for $51.2 million. The signatory for Naftali Group was Michael Naftali.

Prior sales and revenue

The 70,665-square-foot property generated revenue of $1 million or $14 per square foot, according to the most recent income and expense figures.

The property

The 470 Kent Avenue parcel has frontage of 105 feet and is 533 feet deep with a total lot size of 68,690 square feet. The lot is irregular. The city-designated market value for the property in 2022 is $4.3 million.The most recent loan totaled $75.9 million and was provided by HSBC Bank on May 27, 2020.

Violations and lawsuits

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

Development

There are no active new building construction projects or major alteration projects with initial costs more than $5 million on this tax lot.

The neighborhood

In Williamsburg, the bulk, or 39 percent of the 49.7 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 7th highest sale turnover among other neighborhoods in the city with $2.2 billion in sales volume in the last two years. For development, Williamsburg is the 10th most active neighborhood among other neighborhoods. It had 4.3 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 four of the 11 commercial properties representing 788,829 square feet of the 794,064 square feet. The largest owner is Williamsburg Montessori, followed by Spitzer Enterprises and then Naftali Group.
On the tax block, there were four new building construction projects totaling 1,470,600 square feet. The largest is a 605-unit, 602,188-square-foot R-2 building developed by Eliot Spitzer with plans filed December 17, 2014 and permitted July 21, 2016. The second largest is a 249-unit, 380,375-square-foot R-2 building developed by Michael Witek with plans filed January 5, 2021 and it has not been permitted yet.

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

The borrower

The PincusCo database currently indicates that Naftali Group owned at least 11 commercial properties in New York City with 534,728 square feet and a city-determined market value of $107.6 million. (Market value is typically about 50% of actual value.) The portfolio has $810.7 million in debt, with top three lenders as HSBC Bank, Bank Hapoalim, and Bank OZK respectively. Within the portfolio, the bulk, or 47 percent of the 534,728 square feet of built space are elevator properties, with industrial properties next occupying 44 percent of the space. The bulk, or 51 percent of the built space, is in Brooklyn, with Manhattan next at 49 percent of the space.

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