Rabsky Group pays $18.8M for formerly bankrupt conversion in Crown Heights

Rabsky Group through the entity 945 Bergen DH LLC paid $18.8 million through a bankruptcy to creditors including Churchill Real Estate Holdings through the entity Nassau Brewing Company Landlord LLC for the 38-unit residential elevator building (D7) at 945 Bergen Street in Crown Heights, Brooklyn. The expected use is cash flowing.
The deal closed on August 2, 2024 and was recorded on August 14, 2024. The property has 51,376 square feet of built space according to a PincusCo analysis of city data. The sale price per built square foot is $365 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 purchase was financed with a $15.8 million loan from Berkadia Commercial Mortgage.
The seller bought the property on February 29, 2008, for $7.5 million. The signatory for Churchill Real Estate Holdings was Sean Rucker. The signatory for Rabsky Group was Simon Dushinsky. The contract date was April 10, 2024. The Real Deal reported on the sale in March after Rabsky won the auction. Newmark’s Dan O’Brien and Maurice Suede led a team that brokered the sale through the auction.

PincusCo reported on the project when investor Churchill placed the property in bankruptcy in 2021, seeking a sale. Churchill Real Estate, which was a co-owner of the stalled residential and commercial development at 945 Bergen Street in Crown Heights, placed the owner entity into bankruptcy, citing management failures and $18 million in secured debts.

The plan envisioned a bankruptcy sale of the asset. The chapter 11 filing made by Nassau Brewing Company Landlord LLC in the Eastern District of New York said alleged mismanagement precipitated the need to file for restructuring and seek the sale. The property was co-owned by Crown Hill Development. The successor manager of the project is Sean Rucker, a vice president at Churchill, a Soho-based development firm founded by Justin Ehrlich and Sorabh Maheshwari.

Churchill held a preferred membership interest in the project. The project was delayed due to the alleged mismanagement before Churchill took over the filing asserts. According to the project history provided in the bankruptcy filing, Rucker was appointed successor manager on July 12, 2021, to replace the former manager Fabian Friedland of Crow Hill Development. The filing says the change was made “for cause due to various payment and performance defaults involving, inter alia, misappropriation of funds and other wrongdoings.” Friedland did not immediately respond to a request for comment.

Prior sales and revenue

Prior to this transaction, PincusCo has no record that the buyer Rabsky Group had purchased any other properties and sold three properties in three transactions for a total of $143.3 million over the past 24 months.
The seller Churchill Real Estate Holdings had not purchased any other properties and sold five properties in five transactions for a total of $50.9 million over the same time period.

The property

The residential elevator building with 36 residential units in Crown Heights has 51,376 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 78 feet and is 153 feet deep with a total lot size of 11,939 square feet. The lot is irregular. The zoning is R7A which allows for up to 4 times floor area ratio (FAR) for residential with inclusionary housing. The city-designated market value for the property in 2022 is $5 million.

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 51 housing violations and $1,000 in OATH penalties in the last year.

Development

On the lot, there was a major alteration construction project, 320627595, for a 38-unit, 140,671 square-foot residential conversion. The project was submitted by Fabian Friedland with plans filed September 24, 2014 and permitted June 16, 2016.

The block

On this tax block, PincusCo has identified the owners of 10 of the 21 commercial properties representing 106,682 square feet of the 302,714 square feet. The largest owner is Chaim Simkowitz, followed by Black Spurce Management and then Asher Sussman.
There are no active new building construction projects on this tax block.

The majority, or 34 percent of the 302,714 square feet of built space are walkup buildings, with elevator buildings next occupying 23 percent of the space.

The seller

The PincusCo database currently indicates that Churchill Real Estate Holdings owned at least seven commercial properties with 126 residential units in New York City with 144,890 square feet and a city-determined market value of $51 million. (Market value is typically about 50% of actual value.) The portfolio has $104.9 million in debt, with top three lenders as Square Mile Capital Management, Silver Point Capital, and Calmwater Capital respectively. Within the portfolio, the bulk, or 45 percent of the 144,890 square feet of built space are elevator properties, with walkup properties next occupying 34 percent of the space. They are all located in Manhattan.

The buyer

The PincusCo database currently indicates that Rabsky Group owned at least 30 commercial properties with 2,750 residential units in New York City with 2,249,930 square feet and a city-determined market value of $355.1 million. (Market value is typically about 50% of actual value.) The portfolio has $2.1 billion in debt, with top three lenders as Bank Leumi, Apollo Global Management, and Madison Realty Capital respectively. Within the portfolio, the bulk, or 90 percent of the 2,249,930 square feet of built space are elevator properties, with industrial properties next occupying 7 percent of the space. The bulk, or 82 percent of the built space, is in Brooklyn, with Queens next at 18 percent of the space.

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