Nursing home investors pay $32M for two industrial properties in Williamsburg, get $32M loan

Ultimate Care nursing home investors Leo Friedman, and Samuel Gutman through the entity Kent Ave Property, LLC paid $32 million to Jacques Freund and Morris Lowy through the entity Nap Industries, Inc. for the industrial building (F5) at 667 Kent Avenue in Williamsburg, Brooklyn and industrial building (F9) at 25 Hooper Street in Williamsburg, Brooklyn.

The acquisition was financed with a $32 million loan from Bankwell Bank.
The deal closed on October 3, 2022 and was recorded on October 21, 2022. The two properties have 59,597 square feet of built space and 51,384 square feet of additional air rights for a total buildable of 110,956 square feet according to PincusCo analysis of city data. The sale price per built square foot is $536 and the price per buildable square foot is $288 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 signatory for Jacques Freund and Morris Lowy was Jacques Freund and Morris Lowy. The signatory for Ultimate Care, Leo Friedman, and Samuel Gutman was Chaim Sholam Sternhill. Ultimate Care is a national nursing home network based in Brooklyn.

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 667 Kent Avenue.

Prior sales and revenue

Prior to this transaction, PincusCo has no record that the buyer Ultimate Care had purchased any other properties and has no record it sold any properties over the past 24 months.
The seller Jacques Freund had not purchased any other properties and had not sold any properties over the same time period. The two properties with a total of 59,597 square feet of built space generated revenue of $1.2 million per year or $20 per square foot. The sale price per square foot was $537.

The property

The 667 Kent Avenue parcel has frontage of 143 feet and is 227 feet deep with a total lot size of 32,737 square feet. The zoning is M1-2 which allows for up to 2 times floor area ratio (FAR) for manufacturing The city-designated market value for the property in 2022 is $2.6 million.

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 received $625 in ECB penalties and $625 in OATH penalties 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 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 7th highest sale turnover among other neighborhoods in the city with $2 billion in sales volume in the last two years. For development, Williamsburg is the 8th most active neighborhood among other neighborhoods. It had 4.6 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. There was one pre-foreclosure suit filed among other industrial buildings in the past 12 months.

The block

There are no active new building construction projects on this tax block.

The majority, or 88 percent of the 67,869 square feet of built space are industrial buildings, with office buildings next occupying 12 percent of the space.

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