Three Wall Capital signs $19.2M refi with Ardent for Gowanus hotel

Three Wall Capital through the entity Union Hotel Property LLC as borrower signed a refi loan with lender Ardent Companies through the entity Aff V Trust valued at $19.2 million for the hotel building (H3) at 625 Union Street in Gowanus, Brooklyn.
The deal closed on February 3, 2023 and was recorded on February 9, 2023. The prior lender was Trimont Real Estate Advisors which held debt that had an original loan amount of $30.5 million. The property has 39,780 square feet of built space according to PincusCo analysis of city data. The loan price per built square foot is $483 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 December 9, 2013, for $32.9 million. The signatory for Three Wall Capital was Alan J. Kanders. The signatory for Ardent Companies was Dror Bezalel. Trimont Real Estate Advisors bought the debt in August 2021 which had an original principal of $30.5 million.

Prior sales and revenue

The owner according to the Department of Housing Preservation and Development is Raviraj Dave, head officer. The business entity is Union Street Hotel Opco Llc.

The property

The 625 Union Street parcel has frontage of 73 feet and is 190 feet deep with a total lot size of 16,498 square feet. The lot is irregular. 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 $11.7 million.

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 one DOB violation, $2,500 in ECB penalties, and $2,500 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 $5 million on this tax lot.

The neighborhood

In Gowanus, the bulk, or 47 percent of the 9.3 million square feet of commercial built space are industrial buildings, with elevator buildings next occupying 18 percent of the space. In sales, Gowanus has 1.2 times the average sales volume among other neighborhoods with $396.5 million in sales volume in the last two years and is the 17th highest in Brooklyn. For development, Gowanus is the 6th most active neighborhood among other neighborhoods. It had 4.7 million square feet of commercial and multi-family construction under development in the last two years, which represents 50 percent of the neighborhood’s built space. There was one pre-foreclosure suit filed among other hotel buildings in the past 12 months.

The block

On this tax block, PincusCo has identified the owners of two of the 16 commercial properties representing 40,140 square feet of the 122,467 square feet. The two identified owners are Three Wall Capital and Gindi Capital.
On the tax block, there were three new building construction projects totaling 196,839 square feet. The largest is a 193-unit, 161,490-square-foot R-2 building developed by Alexander Cutrona with plans filed December 8, 2021 and permitted May 23, 2022. The second largest is a 76-unit, 18,962-square-foot R-1 building developed by Alec Shtromandel with plans filed March 4, 2013 and permitted August 7, 2014.

The majority, or 51 percent of the 122,467 square feet of built space are hotel buildings, with industrial buildings next occupying 33 percent of the space.

The borrower

The PincusCo database currently indicates that Three Wall Capital owned at least two commercial properties in New York City with 68,857 square feet and a city-determined market value of $23.1 million. (Market value is typically about 50% of actual value.) The portfolio has $17 million in debt, borrowed from East West Bank and VSD OR LLC. Within the portfolio, all identified are hotel properties. They are all located in Brooklyn.

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