RiseBoro signs $40M construction loan with Webster Bank for 58-unit project in East Flatbush

RiseBoro Community Partnership through the entity Bethany MH Housing Development Fund Company, Inc. as borrower signed a new construction loan with lender Webster Bank valued at $40 million for two properties including the specialty building (I7) at 604 East 40th Street in East Flatbush, Brooklyn and development building (V0) at 594 East 40th Street in East Flatbush, Brooklyn.

On these lots, there is one active new building construction project for a 58-unit, 31,472-square-foot R-2 building. The project was developed by Riseboro with plans filed October 3, 2019.

The deal closed on September 19, 2022 and was recorded on September 26, 2022. The prior lender was New York City Acquisition Fund LLC which held debt that had an original loan amount of $3.9 million. The two properties have 8,432 square feet of built space and 9,600 square feet of additional air rights for a total buildable of 18,000 square feet according to PincusCo analysis of city data.
The signatory for RiseBoro Community Partnership was Emily Kurtz. The signatory for Webster Bank was K. James Dittbrenner. Analysis of new construction lenders which found prior to the two Webster Bank loans recorded yesterday, the lender had provided about $160 million in new construction financing on five projects over the past 12 months.

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 604 East 40th Street.

The property

The 604 East 40th Street parcel has frontage of 200 feet and is 100 feet deep with a total lot size of 20,000 square feet. The zoning is R4 which allows for up to 0.75 times floor area ratio (FAR) for residential. The city-designated market value for the property in 2022 is $1.3 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 $80 in OATH penalties in the last year.

The neighborhood

In East Flatbush, the bulk, or 32 percent of the 42.5 million square feet of commercial built space are elevator buildings, with walkup buildings next occupying 23 percent of the space. In sales, East Flatbush has had very little sales volume relative to other neighborhoods with $191.3 million in sales volume in the last two years. For development, East Flatbush has 2 times the average amount of major developments relative to other neighborhoods and is the 9th highest in Brooklyn. It had 2 million square feet of commercial and multi-family construction under development in the last two years, which represents 5 percent of the neighborhood’s built space.

The block

There is one active new building construction project totaling 31,472 square feet. It is a 58-unit, 31,472-square-foot R-2 building developed by Ryan Cassidy with plans filed October 3, 2019 and it has not been permitted yet.

the majority, or 100 percent of the 8,432 square feet of built space are specialty buildings, with development buildings next occupying 0 percent of the space.

The borrower

The PincusCo database currently indicates that Riseboro Community Partnership owned at least 116 commercial properties in New York City with 2,149,491 square feet and a city-determined market value of $195.2 million. (Market value is typically about 50% of actual value.) Within the portfolio, the bulk, or 64 percent of the 2,149,491 square feet of built space are elevator properties, with walkup properties next occupying 24 percent of the space. The bulk, or 82 percent of the built space, is in Brooklyn, with Queens next at 16 percent of the space.

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