SMS Financial buys $6.1M note on two Bushwick walkups
SMS Financial through the entity SMS Financial Strategic Investments IV, LLC bought a note with an original principal of $6.1 million from Customers Bank secured by Cayuga Capital Management’s 12-unit residential walkup building (C1) at 290 Harman Street in Bushwick, Brooklyn and 12-unit residential walkup building (C1) at 294 Harman Street in Bushwick, Brooklyn.
This is at least the second loan SMS Financial has purchased in New York City. The other was the purchase of $3.7 million in debt secured by the 54-unit 3435 Olinville Avenue in the Bronx.
The more recent note sale closed on May 9, 2023 and was recorded on May 19, 2023. The prior lender was Customers Bank which held debt that had an original loan amount of $6.1 million.
The two properties have 12,675 square feet of built space and 4,023 square feet of additional air rights for a total buildable of 16,645 square feet according to a PincusCo analysis of city data.
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 294 Harman Street.
Prior sales and revenue
The owner according to the Department of Housing Preservation and Development is Jacob Sacks, head officer. The business entity is Slip And Fall LLC. The two properties with a total of 12,675 square feet of built space generated revenue of $515,685 per year or $41 per square foot.
The property
The residential walkup building with 12 residential units in Bushwick has 12,675 square feet of built space and 4,023 square feet of additional air rights for a total buildable of 16,645 square feet according to a PincusCo analysis of city data. The parcel has frontage of 25 feet and is 137 feet deep with a total lot size of 3,410 square feet. The lot is irregular. 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 $1.2 million.
Violations and lawsuits
There were no lawsuits or bankruptcies filed against the properties for the past 24 months. In addition, according to city public data, the properties have received three DOB violations, 14 housing violations, and $2,630 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 $1 million on this tax lot.
The block
On the tax block of 294 Harman Street, PincusCo has identified the owners of 20 of the 36 commercial properties representing 117,019 square feet of the 177,721 square feet. The largest owner is Yehuda Aviv, followed by Watermark Capital Group and then Riseboro Community Partnership.
There are no active new building construction projects on this tax block.
The majority, or 64 percent of the 177,721 square feet of built space are walkup buildings, with specialty buildings next occupying 17 percent of the space.
The borrower
The PincusCo database currently indicates that Cayuga Capital Management owned at least 24 commercial properties with 204 residential units in New York City with 229,415 square feet and a city-determined market value of $44 million. (Market value is typically about 50% of actual value.) The portfolio has $140.4 million in debt, with top three lenders as M&T Bank, Amherst Capital Management, and BLDG Management respectively. Within the portfolio, the bulk, or 46 percent of the 229,415 square feet of built space are walkup properties, with D7 properties next occupying 27 percent of the space. The bulk, or 96 percent of the built space, is in Brooklyn, with Queens next at 4 percent of the space.
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