Yitzchok Katz pays $25.5M to ISJ, Jemstone, Billy Shalom, others for Downtown Brooklyn dev property

Investor and developer Yitzchok Katz through the entity 372 Livingston LLC paid $25.5 million to ISJ Management, Jemstone Group, and Billy Shalom through the entity 4000 Property Associates LLC (and 10 others) for the 22-unit residential walkup building (C7) at 364 Livingston Street and the adjacent mixed-use building (K4) at 60 Flatbush Avenue in Downtown Brooklyn, Brooklyn.
The deal closed on August 25, 2022 and was recorded on September 6, 2022. The two properties have 40,447 square feet of built space and 116,477 square feet of additional air rights for a total buildable of 156,870 square feet according to PincusCo analysis of city data. The sale price per built square foot is $630 and the price per buildable square foot is $162 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 ISJ Management, Jemstone Group, and Billy Shalom was Samuel Jemal, Joseph Jemal, Rachelle Jemal, William D. Shalom, Isaac Shalom, and Adam Azrak. The signatory for Yitzchok Katz was Yitzchok Katz. The sellers were composed of 11 different entities related to members of the Jemal, Shalom and Azrak families, and others.

Yitzchok Katz financed the purchase through the entity 372 Livingston LLC as borrower, obtaining an acquisition loan with lender G4 Capital Partners through the entity G4 18243, LLC valued at $29.5 million for two properties including the 22-unit residential walkup building (C7) at 358-376 Livingston Street in Boerum Hill, Brooklyn and mixed-use building (K4) at 60 Flatbush Avenue in Boerum Hill, Brooklyn. The loan included an $11 million gap loan and a $12.78 million project loan. No building loan has been recorded. This is adjacent to the Steiner NYC-developed, 750-unit 333 Schermerhorn Street.

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 364 Livingston Street.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer Yitzchok Katz purchased 12 properties in seven transactions for a total of $84 million and has no record it sold any properties over the past 24 months.
The seller ISJ Management had not purchased any other properties and had not sold any properties over the same time period. The former owners according to the Department of Housing Preservation and Development includes Isaac Jemal, head officer and Samira Mohamed, site manager. The business entities are Isj Management Corp. and Livingston Street Realty Associates. The two properties with a total of 40,447 square feet of built space generated revenue of $1.4 million per year or $34 per square foot. The sale price per square foot was $630.

The property

The 364 Livingston Street parcel has frontage of 209 feet and is 70 feet deep with a total lot size of 13,937 square feet. The lot is irregular. The zoning is C6-4 which allows for up to 10 times floor area ratio (FAR) for commercial and up to 10 times FAR for residential with inclusionary housing. The city-designated market value for the property in 2022 is $4.5 million.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the properties since September of 2020. In addition, according to city public data, the properties have not received any significant violations 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 block

There is one recent new building construction project totaling 627,640 square feet. It is a 750-unit, 627,640-square-foot R-2 building developed by Douglas Steiner with plans filed June 27, 2012 and permitted July 25, 2014.

The majority, or 90 percent of the 734,348 square feet of built space are elevator buildings, with walkup buildings next occupying 6 percent of the space.

The seller

The PincusCo database currently indicates that Jemstone Group owned at least five commercial properties in New York City with 92,930 square feet and a city-determined market value of $22.1 million. (Market value is typically about 50% of actual value.) The portfolio has $40.6 million in debt, borrowed from Signature Bank. Within the portfolio, the bulk, or 79 percent of the 92,930 square feet of built space are mixed-use properties, with retail properties next occupying 21 percent of the space. The bulk, or 31 percent of the built space, is in Queens, with Bronx next at 27 percent of the space.
The PincusCo database currently indicates that Isj Management owned at least four commercial properties in New York City with 85,210 square feet and a city-determined market value of $39.8 million. (Market value is typically about 50% of actual value.) Within the portfolio, the bulk, or 62 percent of the 85,210 square feet of built space are office properties, with retail properties next occupying 38 percent of the space. The bulk, or 62 percent of the built space, is in Manhattan, with Bronx next at 38 percent of the space.

The buyer

The PincusCo database currently indicates that Yitzchok Katz owned at least 19 commercial properties in New York City with 147,132 square feet and a city-determined market value of $27.4 million. (Market value is typically about 50% of actual value.) The portfolio has $224.6 million in debt, with top three lenders as G4 Capital Partners, SCALE Lending, and Scale Lending respectively. Within the portfolio, the bulk, or 53 percent of the 147,132 square feet of built space are elevator properties, with specialty properties next occupying 15 percent of the space. The bulk, or 78 percent of the built space, is in Brooklyn, with Queens next at 22 percent of the space.

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