Two Trees signs $80M construction loan with M&T Bank for conversion in Williamsburg

Two Trees Management through the entity Domino Refinery LLC as borrower signed a rehab construction loan with lender M&T Bank through the entity Manufacturers And Traders Trust Company valued at $80 million for a renovation of the industrial building (F1) at 292-314 Kent Avenue in Williamsburg, Brooklyn.
The deal closed on August 15, 2022 and was recorded on August 22, 2022. The property has 93,882 square feet of built space and 316,011 square feet of additional air rights for a total buildable of 409,998 square feet according to PincusCo analysis of city data. The loan price per built square foot is $852 and the price per buildable square foot is $195 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 signatory for Two Trees Management was David C. Walentas. This is for the rehab of the building constructed in 1885, according to city records.

The property

The 292-314 Kent Avenue parcel has frontage of 313 feet and is 217 feet deep with a total lot size of 68,106 square feet. The zoning is C6-2 which allows for up to 6 times floor area ratio (FAR) for commercial and up to 6.02 times FAR for residential. The city-designated market value for the property in 2022 is $6.9 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 five DOB violations, $7,530 in ECB penalties, and $7,555 in OATH penalties in the last year.

Development

For the tax lot building, it received its initial certificate of occupancy on September 24, 2019. On these lots, there are four active new building construction projects and major alteration projects with initial costs more than $5 million, totaling 1,326,401 square feet. The largest is a new building project for a 680-unit, 785,888-square-foot R-2 building developed by Jed Walentas with plans filed May 30, 2014 and it has not been permitted yet. The second largest is a new building project for a 422-unit, 489,804-square-foot R-2 building developed by Jed Walentas with plans filed June 26, 2014 and it has not been permitted yet.

The neighborhood

In Williamsburg, the bulk, or 39 percent of the 50 million square feet of commercial built space are elevator buildings, with walkup buildings next occupying 25 percent of the space. In sales, Williamsburg has the 8th highest sale turnover among other neighborhoods in the city with $1.8 billion in sales volume in the last two years. For development, Williamsburg is the 9th most active neighborhood among other neighborhoods. It had 5.3 million square feet of commercial and multi-family construction under development in the last two years, which represents 10 percent of the neighborhood’s built space. There was one pre-foreclosure suit filed among other industrial buildings in the past 12 months.

The block

On this tax block, PincusCo has identified the owners of one of the five commercial properties representing 449,695 square feet of the 543,577 square feet. The identified owner is Two Trees Management.
There are five active new building construction projects totaling 1,733,334 square feet. The largest is a 680-unit, 785,888-square-foot R-2 building developed by Jed Walentas with plans filed May 30, 2014 and permitted March 17, 2015. The second largest is a 422-unit, 489,804-square-foot R-2 building developed by Jed Walentas with plans filed June 26, 2014 and permitted March 17, 2015.

The majority, or 83 percent of the 543,577 square feet of built space are elevator buildings, with industrial buildings next occupying 17 percent of the space.

The borrower

The PincusCo database currently indicates that Two Trees Management owned at least 37 commercial properties in New York City with 2,911,357 square feet and a city-determined market value of $699.1 million. (Market value is typically about 50% of actual value.) The portfolio has $737.8 million in debt, with top three lenders as Wells Fargo, M&T Bank, and Signature Bank respectively. Within the portfolio, the bulk, or 48 percent of the 2,911,357 square feet of built space are elevator properties, with rental condo properties next occupying 34 percent of the space. The bulk, or 79 percent of the built space, is in Brooklyn, with Manhattan next at 21 percent of the space.

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