Solomon Schwimmer signs $13.8M construction loan with S3 Capital for 38-unit development in Bedford Stuyvesant

Solomon Schwimmer through the entity Madison Heights NY LLC as borrower signed a new construction loan with lender S3 Capital through the entity S3 RE Funding III LLC valued at $13.8 million for the 38-unit development (V0) at 650 Madison Street in Bedford Stuyvesant, Brooklyn.
The deal closed on January 12, 2023 and was recorded on January 20, 2023. The prior lender was Maxim Credit Group which held debt that had an original loan amount of $3.8 million. The property has zero square feet of built space and 26,066 square feet of additional air rights for a total buildable of 26,066 square feet according to PincusCo analysis of city data. The loan price per buildable square foot is $527 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 owner bought the property on October 9, 2015, for $2.2 million. The signatory for Solomon Schwimmer was Solomon Schwimmer. The signatory for S3 Capital was Joshua Crane.

The property

The 650 Madison Street parcel has frontage of 130 feet and is 100 feet deep with a total lot size of 13,033 square feet. The zoning is R6B which allows for up to 2 times floor area ratio (FAR) for residential with inclusionary housing. The city-designated market value for the property in 2022 is $867,000.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the property since September of 2020. In addition, according to city public data, the property has received $5,000 in ECB penalties and $6,200 in OATH penalties in the last year.

Development

On the lot, there is a new building project for a 38-unit, 26,010 square-foot R-2 building developed by Solomon Schwimmer with plans filed April 8, 2022 and it has not been permitted yet.

The neighborhood

In Bedford Stuyvesant, the bulk, or 34 percent of the 53.8 million square feet of commercial built space are elevator buildings, with walkup buildings next occupying 30 percent of the space. In sales, Bedford Stuyvesant has 2.4 times the average sales volume among other neighborhoods with $822.9 million in sales volume in the last two years and is the 5th highest in Brooklyn. For development, Bedford Stuyvesant has 3.8 times the average amount of major developments relative to other neighborhoods and is the 4th highest in Brooklyn. It had 4 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. There was one pre-foreclosure suit filed among other development buildings in the past 12 months.

The block

On this tax block, PincusCo has identified the owners of eight of the 13 commercial properties representing 66,415 square feet of the 103,084 square feet. The largest owner is Workforce Housing Group, followed by Pincus S. Schwimmer and then Martin Watt.
On the tax block, there were eight new building construction projects totaling 85,229 square feet. The largest is a 38-unit, 26,024-square-foot R-2 building developed by Boaz Gilad with plans filed November 16, 2015 and it has not been permitted yet. The second largest is a 38-unit, 26,010-square-foot R-2 building developed by Solomon Schwimmer with plans filed April 8, 2022 and permitted May 19, 2022.

The majority, or 94 percent of the 103,084 square feet of built space are walkup buildings, with retail buildings next occupying 6 percent of the space.

The borrower

The PincusCo database currently indicates that Solomon Schwimmer owned at least 31 commercial properties in New York City with 323,550 square feet and a city-determined market value of $53.4 million. (Market value is typically about 50% of actual value.) The portfolio has $139.9 million in debt, with top three lenders as Valley National Bank, Sabal Capital Partners, and Parke Bank respectively. Within the portfolio, the bulk, or 50 percent of the 323,550 square feet of built space are walkup properties, with elevator properties next occupying 48 percent of the space. The bulk, or 94 percent of the built space, is in Brooklyn, with Bronx next at 6 percent of the space.

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