Sela Group signs $15M construction loan with Madison Realty Capital in Clinton Hill

Sela Group through the entity Sela Ryerson LLC as borrower signed a new construction loan with lender Madison Realty Capital through the entity Brooklyn Queens Portfolio Lender 1 LLC valued at $15 million for properties including the midblock industrial building at 29 Ryerson Street in Clinton Hill, Brooklyn.
The deal closed on March 16, 2022 and was recorded on April 26, 2022. The prior lender was Madison Realty Capital which held debt that had an original loan amount of $10.5 million.
The signatory for Sela Group was Gal Sela. Gal Sela is the founder of Sela Group.

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 29 Ryerson Street.

The property

The 29 Ryerson Street parcel has frontage of 354 feet and is 100 feet deep with a total lot size of 35,483 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 $10.4 million.

Development

On these lots, there are two active new building construction projects and major alteration projects with initial costs more than $5 million, totaling 17,394 square feet. The largest is a new building project for a 17,394-square-foot B building developed by Daniel Cobleigh with plans filed December 31, 2015 and it has not been permitted yet. The second largest is a major alteration project for a 190,818-square-foot B building developed by Allen Konstam with plans filed December 31, 2015 and it has not been permitted yet.

The neighborhood

In Clinton Hill, the bulk, or 36 percent of the 18.8 million square feet of commercial built space are residential elevator buildings, with 1-4 family buildings next occupying 22 percent of the space. In sales, Clinton Hill has near average sales volume among other neighborhoods with $303.9 million in sales volume in the last two years and is the 14th highest in Brooklyn. For development, Clinton Hill has 1.4 times the average amount of major developments relative to other neighborhoods and is the 14th highest in Brooklyn. It had 1.3 million square feet of commercial and multi-family construction under development in the last two years, which represents 7 percent of the neighborhood’s built space.

The block

On the tax block of 29 Ryerson Street, PincusCo has identified the owners of five of the six commercial properties representing 358,781 square feet of the 638,781 square feet. The largest owner is Sela Group, followed by American Development Group and then Meadow Partners.

The majority, or 100 percent of the 638,781 square feet of built space are industrial buildings, with development buildings next occupying 0 percent of the space.

The borrower

The PincusCo database currently indicates that Sela Group owned at least five commercial properties with 228,065 square feet and a city-determined market value of $18.4 million. (Market value is typically about 50% of actual value.) The portfolio has $204.8 million in debt, borrowed from Madison Realty Capital and Maxim Credit Group. Within the portfolio, the bulk, or 84 percent of the 228,065 square feet of built space are industrial properties, with hotel properties next occupying 16 percent of the space. They are all located in Brooklyn.

Surrounding

Within a 400-foot radius of 29 Ryerson Street, PincusCo identified five commercial real estate items of interests occurred over the past 24 months.
Of those five items, one was for major renovation including a certificate of occupancy change. It was an initial temporary certificate of occupancy issued on February 25, 2021 for the $34.8 million renovation of 532,210-square-foot B building with no residential units at 47 Hall St.
Of those five items, two were sales above $5 million totaling $25.8 million. The most recent of the two was Meadow Partners which bought the 14,780-square-foot, one-unit industrial (E9) on 8 Grand Avenue and one other property for $17.2 million from Workable City Development on November 15, 2021.
Of those five items, two were loans above $5 million totaling $30.6 million. The most recent of the two was Meadow Partners which borrowed $22.5 million from Fortress Investment Group secured by the 14,780-square-foot, one-unit industrial (E9) on 8 Grand Avenue and one other property on November 15, 2021.

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