NYMT files $7M pre-foreclosure at Crown Heights walkups

New York Mortgage Trust through its affiliate Residential Mortgage Aggregation Trust filed a $7 million pre-foreclosure action in U.S. District Court in Brooklyn against Zalmen Wagschal, the owner of the adjacent walkup buildings 1365 St. John’s Place and 1369 St. John’s Place in Crown Heights, Brooklyn.
Case LINK
Complaint 1369 St Johns Place complaint

According to the complaint, “Borrower defaulted under the Loan Documents by failing to pay the debt due and owing under the Notes as provided for therein. Thereafter, Plaintiff and Borrower executed that certain Construction Loan Extension Agreement dated April 4, 2023,” which extended the maturity date to July 1, 2023. Despite that extension, the lender alleges the loan is in default and has not been repaid.

Court filing represent the positions of one party and are not necessarily accurate or complete.

Wagschal bough the property in July 2014 for $2.8 million.

The walkup building at 1365 St. John’s Place with 10 residential units in Crown Heights has 7,368 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 20 feet and is 112 feet deep with a total lot size of 2,239 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 $828,000. The most recent loan totaled 0.0 and was provided by Churchill Real Estate Holdings on March 3, 2022.

The walkup building at 1369 St. John’s Place with 10 residential units in Crown Heights has 7,367 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 20 feet and is 112 feet deep with a total lot size of 2,239 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 $828,000. The most recent loan totaled 0.0 and was provided by Churchill Real Estate Holdings on March 3, 2022.

The block

On this tax block, PincusCo has identified the owners of 25 of the 45 commercial properties representing 235,235 square feet of the 315,736 square feet. The largest owner is Abe Stein, followed by Benjamin Smuk and then Zalmen Wagschal. On the tax block, there was one new building construction project filed totaling 4,080 square feet. It is a seven-unit, 4,080 square-foot residential (R-2) building submitted by Matt Gold with plans filed September 26, 2018 and it has not been permitted yet.

The owner

The PincusCo database currently indicates that Zalmen Wagschal owned at least 10 commercial properties with 89 residential units in New York City with 80,356 square feet and a city-determined market value of $11 million. (Market value is typically about 50% of actual value.) The portfolio has $59.1 million in debt, with top three lenders as Citibank, Extensia Financial, and Hanover Community Bank respectively. Within the portfolio, the bulk, or 77 percent of the 80,356 square feet of built space are walkup properties, with hotel properties next occupying 20 percent of the space. They are all located in Brooklyn.

The owner according to the Department of Housing Preservation and Development is Zach Spira, head officer. The business entity is 1365-1369 St Johns Place Llc.

The surrounding

Within a 400-foot radius of 1365 St Johns Place, PincusCo identified three commercial real estate items of interests occurred over the past 24 months. Of those three items, three were loans above $5 million totaling $38.6 million. The most recent of the three was Zalmen Wagschal in which borrowed $11.6 million from Hanover Community Bank secured by the 6,840-square-foot, 16-unit rental (C7) on 252 Schenectady Avenue and three other properties on August 17, 2022.

Direct link to the property’s ACRIS page and link to DOB NOW portal.