Naftali Group signs $83M refi with Bank OZK for 431-unit projects in Williamsburg
Naftali Group through the entity 470 Kent Ave Associates LLC as borrower signed a refi loan with lender Bank OZK valued at $83 million for the industrial building (F5) at 470 Kent Avenue in Williamsburg, Brooklyn.
On this parcel, Miki Naftali’s Naftali Group filed plans for two mixed-use buildings with a total of 431 units and more than 486,000 square feet in Williamsburg, Brooklyn, in two separate filings. He bought the properties for a total of $102.4 million in May 2020.
The deal closed on November 16, 2022 and was recorded on December 2, 2022. The prior lender was HSBC Bank which held debt that had an original loan amount of $87.9 million. The signatory for Naftali Group was Michael Naftali. The signatory for Bank OZK was Cliffton Hill.
The property
The 470Kent Avenue parcel has frontage of 999 feet and is 281 feet deep with a total lot size of 94,500 square feet. The lot is irregular. The city-designated market value for the property in 2022 is $12.6 million.
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 received one DOB violation, $12,030 in ECB penalties, and $12,030 in OATH penalties in the last year.
Development
On the lot, there are three active new building construction projects and major alteration projects with initial costs more than $5 million, totaling 868,412 square feet. The largest is a new building project for a 182-unit, 380,375 square-foot R-2 building developed by Naftali Group with plans filed January 5, 2021 and it has not been permitted yet. The second largest is a new building project for 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 neighborhood
In Williamsburg, the bulk, or 39 percent of the 50 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 6th highest sale turnover among other neighborhoods in the city with $2.1 billion in sales volume in the last two years. For development, Williamsburg is the 7th most active neighborhood among other neighborhoods. It had 5 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 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 Spitzer Enterprises, followed by Naftali Group and then Williamsburg Montessori.
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 $727.7 million in debt, with top three lenders as HSBC Bank, Bank Hapoalim, and CIT Bank 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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