Yitzchok Schwartz pays $64M to Hager, Hagler in flip for large Crown Heights dev site
960 Franklin Avenue schematic (Credit - Hamish Whitefield)
Yitzchok Schwartz through the entity Franklin Plaza II LLC paid $64 million to Isaac Hager and Daryl Hagler through the entity 960 Franklin LLC for the development site composed of three tax lots with the addresses 122 Montgomery Street and 960 Franklin Avenue in Crown Heights, Brooklyn.
This is a flip. Isaac Hager and Daryl Hagler bought the property in November 2022 for $42.4 million.
On these lots, there is one active new building construction project for a 293-unit, 198,310 square-foot R-2 building. The project was submitted by Abraham Zev Golombeck and filed by Abraham Zev Golombeck with plans filed June 14, 2022 and it has not been permitted yet.
To finance the purchase and construction. Schwartz obtained $117 million in financing from G4 Capital Partners.
The deal closed on April 22, 2024 and was recorded on May 3, 2024. The three properties have 88,800 square feet of built space and 114,717 square feet of additional air rights for a total buildable of 203,682 square feet according to a PincusCo analysis of city data. The sale price per built square foot is $720 and the price per buildable square foot is $314 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 Isaac Hager and Daryl Hagler was Motty Shulman. The signatory for Yitzchok Schwartz was Yitzchok Schwartz. The contract date was December 28, 2023.
Brownstoner reported on a Department of Buildings filing to demolish one of the buildings on the property, the Consumer’s Park Brewing Company, built in 1898.
The property
The industrial building in Crown Heights has 88,800 square feet of built space and 114,717 square feet of additional air rights for a total buildable of 203,682 square feet according to a PincusCo analysis of city data. The parcel has frontage of 125 feet and is 287 feet deep with a total lot size of 54,131 square feet. The lot is irregular. The zoning is R6A which allows for up to 3 times floor area ratio (FAR) for residential with inclusionary housing. The city-designated market value for the property in 2022 is $5.7 million.
Violations and lawsuits
The properties were involved in one lawsuit and zero bankruptcies over the past two years. The suit was a $4.5 million money judgment concerning a contract filed on August 24, 2023, by Cheskie Weisz against Haim Kahan. In addition, according to city public data, the properties have received $5,050 in OATH penalties in the last year.
Development
The neighborhood
In Crown Heights, The bulk, or 39 percent of the 46.5 million square feet of commercial built space are walkup buildings, with elevator buildings next occupying 36 percent of the space. In sales, Crown Heights has 2 times the average sales volume among other neighborhoods with $565 million in sales volume in the last two years and is the 12th highest in Brooklyn. For development, Crown Heights has 2.1 times the average amount of major developments relative to other neighborhoods and is the 6th highest in Brooklyn. It had 2.4 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.
The block
On the tax block of 124 Montgomery Street, PincusCo has identified the owners of 10 of the 13 commercial properties representing 492,308 square feet of the 504,701 square feet. The largest owner is United Management Corp, followed by United Management and then Steven C. Neuman.
On the tax block, there were three new building construction projects totaling 454,344 square feet. The largest is a 168-unit, 235,482 square-foot residential (R-2) building submitted by Continuum Companies and filed by Ian Bruce Eichner with plans filed January 5, 2022 and permitted May 9, 2022. The second largest is a 293-unit, 198,310 square-foot residential (R-2) building submitted by Abraham Zev Golombeck and filed by Abraham Zev Golombeck with plans filed June 14, 2022 and it has not been permitted yet.
The majority, or 65 percent of the 504,701 square feet of built space are elevator buildings, with industrial buildings next occupying 20 percent of the space.
The seller
The PincusCo database currently indicates that Daryl Hagler owned at least four commercial properties in New York City with 395,962 square feet and a city-determined market value of $54.2 million. (Market value is typically about 50% of actual value.) The portfolio has $182.9 million in debt, with top three lenders as Popular Bank, Benzion Lebovits, and M&T Bank respectively. Within the portfolio, the bulk, or 80 percent of the 395,962 square feet of built space are hotel properties, with office properties next occupying 12 percent of the space. The bulk, or 46 percent of the built space, is in Queens, with Manhattan next at 34 percent of the space.
The buyer
The PincusCo database currently indicates that Yitzchok Schwartz owned at least eight commercial properties with 379 residential units in New York City with 352,586 square feet and a city-determined market value of $56.2 million. (Market value is typically about 50% of actual value.) The portfolio has $110.5 million in debt, with top three lenders as Greystone & Co., Kearny Bank, and Popular Bank respectively. Within the portfolio, the bulk, or 99 percent of the 352,586 square feet of built space are elevator properties, with development properties next occupying 1 percent of the space. The bulk, or 83 percent of the built space, is in Brooklyn, with Queens next at 17 percent of the space.