Townhouse Rental II, L.L.C. pays $3.9M for residential walkup in Bed Stuy

Townhouse Rental II, L.L.C., which has affiliations with the Carlyle Group, paid $3.9 million to Yigal Adar through the entity 733 Lafayette LLC for the midblock eight-unit residential walkup building at 733 Lafayette Avenue in Bed Stuy, Brooklyn. The buyer is one of the most active in the walkup market in the city over the past year.
The deal closed on May 27, 2022 and was recorded on June 9, 2022. The property has 7,500 square feet of built space according to PincusCo analysis of city data. The sale price per built square foot is $519 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 seller bought the property on December 22, 2011, for $240,000. The signatory for Yigal Adar was Kenneth Golden. The signatory for Townhouse Rental II, L.L.C. was Carter Martin. Yigal Adar signed on the previous mortgage for the property (though the surname was misspelled as “Agar”).

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer Townhouse Rental II, L.L.C. purchased 45 properties in 45 transactions for a total of $172.7 million and has no record it sold any properties over the past 24 months.
The former owners according to the Department of Housing Preservation and Development includes Yigal Adar, head officer and Eitan Peretz, officer. The business entities are East Coast Mgmt Solutions Llc and 733 Lafayette Llc.

The property

The 733 Lafayette Avenue parcel has frontage of 25 feet and is 100 feet deep with a total lot size of 2,500 square feet. The zoning is R6B which allows for up to 2 times floor area ratio (FAR) for residential with inclusionary housing. The property has a 421A exemption that started in 2016 and expires in 2031. The city-designated market value for the property in 2022 is $857,000.

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 $1,200 in OATH penalties in the last year.

Development

For the tax lot building, it received its initial certificate of occupancy on August 28, 2014. 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 Bed Stuy, the bulk, or 38 percent of the 92.5 million square feet of commercial built space are 1-4 family buildings, with residential elevator buildings next occupying 20 percent of the space. In sales, Bed Stuy has 1.5 times the average sales volume among other neighborhoods with $417.3 million in sales volume in the last two years and is the 6th highest in Brooklyn. For development, Bed Stuy is the 8th most active neighborhood among other neighborhoods. It had 4.3 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. There were nine pre-foreclosure suit filed among other residential walkup buildings in the past 12 months.

The block

On this tax block, PincusCo has identified the owners of 13 of the 20 commercial properties representing 165,394 square feet of the 195,892 square feet. The largest owner is Northeast Brooklyn Housing Development Corporation, followed by South Bronx Overall Economic Development Corporation and then Laquasia Thomas. There are six active new building construction projects totaling 31,347 square feet. The largest is a eight-unit, 5,849-square-foot R-2 building developed by Matthew Ahdoot with plans filed December 1, 2014 and it has not been permitted yet. The second largest is an eight-unit, 5,473-square-foot R-2 building developed by Michael Tom with plans filed October 29, 2015 and permitted October 19, 2018.

The majority, or 47 percent of the 297,632 square feet of built space are residential walkup buildings, with 1-4 family buildings next occupying 32 percent of the space.

Surrounding

Within a 400-foot radius of 733 Lafayette Avenue, 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 a permit application filed on November 9, 2020 for the $531,329 renovation of 3,542-square-foot R-2 building with three residential units at 268 Kosciuszko Street.
One of those five items was a sale which Nu World Builders LLC bought the 18,000-square-foot, two-unit two-family building (B2) on 295 Kosciuszko Street and 13 other properties for $8.2 million from National Equity Fund on January 7, 2022.
Of those five items, three were loans above $5 million totaling $64.7 million. The most recent of the three was Greenbrook Partners which borrowed $20.3 million from Invesco Real Estate secured by the 2,000-square-foot, six-unit rental (C2) on 25 Van Buren Street and 11 other properties on January 3, 2022.

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