BEB Capital, Modell family pay $37.1M to Bluejay Management for 64-unit rental in Midwood

BEB Capital and Abby Modell through the entity M&M Ocean Ave LLC paid $37.1 million to Marc Jacobowitz’s Bluejay Management through the entity 1704 Ocean Avenue LLC for the midblock 64-unit residential elevator building at 1704 Ocean Avenue in Midwood, Brooklyn. The building was completed in 2019.
The deal closed on April 6, 2022 and was recorded on April 13, 2022.

The property has 59,840 square feet of built space according to PincusCo analysis of city data. The sale price per built square foot is $619 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 Bluejay Management was Marc Jacobowitz. The signatory for BEB Capital and Abby Modell was Abby Modell.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer BEB Capital purchased five properties in three transactions for a total of $91 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 Marc Jacobowitz, head officer and Joseph Kaniel, officer. The business entity is 1704 Ocean Avenue Llc.

The property

The 1704 Ocean Avenue parcel has frontage of 112 feet and is 151 feet deep with a total lot size of 17,043 square feet. The zoning is R6A which allows for up to 3 times floor area ratio (FAR) for residential with inclusionary housing. The property has a 421A exemption that started in 2020 and expires in 2035. The city-designated market value for the property in 2022 is $8.7 million.The most recent loan totaled $27.5 million and was provided by Cross River Bank on November 16, 2021.

Violations and lawsuits

The property was not involved in any lawsuits or bankruptcies in the past years. In addition, according to city public data, the property has not received any significant violations in the last year.

Development

For the tax lot building, it received its initial certificate of occupancy on June 5, 2019. 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 Midwood, the bulk, or 44 percent of the 44.6 million square feet of commercial built space are 1-4 family buildings, with residential elevator buildings next occupying 34 percent of the space. In sales, Midwood has had very little sales volume relative to other neighborhoods with $141.4 million in sales volume in the last two years. For development, Midwood has had very little major development activity relative to other neighborhoods.It had 335,909 square feet of commercial and multi-family construction under development in the last two years, which represents 0.75 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of five of the 20 commercial properties representing 278,809 square feet of the 422,577 square feet. The largest owner is M&R Management, followed by Marc Jacobowitz and then Joseph Schik. There are two active new building construction projects totaling 55,881 square feet. The largest is a 26-unit, 31,895-square-foot R-2 building developed by Anatoly Grinshteyn with plans filed April 3, 2014 and it has not been permitted yet. The second largest is a 35-unit, 23,986-square-foot R-2 building developed by Eddie Yair with plans filed August 28, 2019 and permitted December 7, 2020.

The majority, or 75 percent of the 522,527 square feet of built space are residential elevator buildings, with mixed-use buildings next occupying 9 percent of the space.

The buyer

The PincusCo database, which is incomplete, currently indicates that BEB Capital owned at least nine commercial properties with 98,533 square feet and a city-determined market value of $30.5 million. (Market value is typically about 50% of actual value.) The portfolio has $71.1 million in debt, with top three lenders as Signature Bank, HSBC Bank, and Bank Leumi respectively. Within the portfolio, the bulk, or 49 percent of the 98,533 square feet of built space are residential elevator properties, with industrial properties next occupying 24 percent of the space. The bulk, or 66 percent of the built space, is in Manhattan, with Brooklyn next at 34 percent of the space.

Surrounding

Within a 400-foot radius of 1704 Ocean Avenue, PincusCo identified seven commercial real estate items of interests occurred over the past 24 months.
Of those seven items, one was in new building development. It was a new building permit issued on December 7, 2020 for a 23,986-square-foot R-2 building with 35 residential units at 1730 Ocean Avenue.
One of those seven items was a sale which Isaac Katz bought the 53,400-square-foot, 46-unit rental (D1) on 2005 Avenue L for $8.6 million from Tomas Rosenthal on June 17, 2020.
Of those seven items, five were loans above $5 million totaling $34.1 million. The most recent of the five was Joseph Schik which borrowed $5.5 million from New York Community Bank secured by the 53,275-square-foot, 54-unit rental (D1) on 1233 East 19th Street on April 8, 2021.

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