Yitzchok Schwartz signs $117M construction loan with G4 Capital for 293-unit project in Crown Heights

Yitzchok Schwartz through the entity Franklin Plaza II LLC as borrower signed a new construction loan with lender G4 Capital Partners through the entity G4 18258, LLC valued at $117 million for a three-parcel development site with the address 960 Franklin Street and alternate addresses at 122A, 124 and 130 Montgomery Street in Crown Heights, Brooklyn. Schwartz paid $64 million for the development site.

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.

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 loan price per built square foot is $1,317 and the price per buildable square foot is $574 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 Yitzchok Schwartz was Yitzchok Schwartz.

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 124 Montgomery Street.

Prior sales and revenue

Out of the three properties, two with a total of 88,800 square feet of built space generated revenue of $1.4 million per year.

The property

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 2.3 times the average sales volume among other neighborhoods with $626.2 million in sales volume in the last two years and is the 7th 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 2.3 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.

The block

On the tax block of 124 Montgomery Street, PincusCo has identified the owners of 11 of the 13 commercial properties representing 492,308 square feet of the 504,701 square feet. The largest owner is Yitzchok Schwartz, followed by United Management Corp and then United Management.
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 borrower

The PincusCo database currently indicates that Yitzchok Schwartz owned at least 11 commercial properties with 379 residential units in New York City with 441,386 square feet and a city-determined market value of $64 million. (Market value is typically about 50% of actual value.) The portfolio has $227.5 million in debt, with top three lenders as G4 Capital Partners, Greystone & Co., and Kearny Bank respectively. Within the portfolio, the bulk, or 79 percent of the 441,386 square feet of built space are elevator properties, with industrial properties next occupying 20 percent of the space. The bulk, or 87 percent of the built space, is in Brooklyn, with Queens next at 13 percent of the space.

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