Jacob Schwimmer signs 3rd ground lease as Haven Capital pays $50M for ground leased fee in Mott Haven

Haven Capital through the entity Haven Propco I Grand Concourse LLC paid $50 million to Jacob Schwimmer through the entity GC Capital Group LLC for the ground leased fee under the midblock 215-unit residential elevator building at 260-298 Grand Concourse in Mott Haven, Bronx.
The deal closed on February 25, 2022 and was recorded on March 14, 2022. The property has 194,341 square feet of built space according to PincusCo analysis of city data.
This transaction is Haven Capital buying the fee ownership of the property, and thus becoming now the landlord, with Schwimmer as the tenant. Schwimmer will continue to control the property as the ground lease tenant. The ground lease has not yet been recorded but is alluded to in a UCC financing of a $67.5 million loan Schwimmer has with Bank Leumi. This is at least Schwimmer’s third ground lease deal since 2020.

He signed a lease valued at $35 million with Montgomery Street Partners and another at 40 Bruckner Boulevard, valued at $32.5 million, with Peter Benedetto II. Haven Capital, a joint venture of Ares Management Capital and Regis Group focuses on ground lease acquisitions, the Commercial Observer reported in 2020.  Joseph Shanley is head of acquisitions at Haven Capital. 
Schwimmer bought the property on October 23, 2018, for $10.3 million. The signatory for Jacob Schwimmer was Jacob Schwimmer. The signatory for Haven Capital was Joseph Shanley.

Prior sales and revenue

Prior to this transaction, Pincusco has no record that the buyer Haven Capital had purchased any other properties and has no record it sold any properties over the past 24 months.
The seller Jacob Schwimmer purchased four properties in three transactions for a total of $70 million and had not sold any properties over the same time period.

The property

The 260-298 Grand Concourse parcel has frontage of 142 feet and is 90 feet deep with a total lot size of 27,916 square feet. The lot is irregular. The zoning is C6-2A which allows for up to 6 times floor area ratio (FAR) for commercial and up to 6.02 times FAR for residential with inclusionary housing. The city-designated market value for the property in 2022 is $9.4 million.The most recent recorded loan totaled $54 million and was provided by Spruce Capital on 6-Nov-20. The Bank Leumi loan is not yet recorded, only the UCC statement was recorded.

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 received three DOB violations, $3,750 in ECB penalties, and $3,750 in OATH penalties in the last year.

Development

On these lots, there is one active new building construction project for a 215-unit, 150,562-square-foot R-2 building. The project was developed by Jacob Schwimmer with plans filed February 12, 2019 and permitted July 27, 2020.

The neighborhood

In Mott Haven, the bulk, or 38 percent of the 43.4 million square feet of built space are residential elevator buildings, with industrial buildings next occupying 23 percent of the space. In sales, Mott Haven has 2.7 times the average sales volume among other neighborhoods with $744 million in sales volume in the last two years and is the highest in Bronx. For development, Mott Haven is the 7th most active neighborhood among other neighborhoods. It had 4.3 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.

The block

On this tax block, PincusCo has identified the owners of seven of the 15 commercial properties representing 217,410 square feet of the 287,540 square feet. The largest owner is Jacob Schwimmer, followed by Josue Velazquez and then Atlantic Development Group. There are four active new building construction projects totaling 804,046 square feet. The largest is a 151-unit, 213,163-square-foot R-2 building developed by Simon Kaufman with plans filed March 28, 2019 and permitted June 11, 2021. The second largest is a 150-unit, 213,163-square-foot R-2 building developed by Simon Kaufman with plans filed March 28, 2019 and permitted August 30, 2021.

The majority, or 67 percent of the 290,696 square feet of built space are residential elevator buildings, with residential walkup buildings next occupying 14 percent of the space.

The seller

The PincusCo database, which is incomplete) currently has records of six commercial properties with 111,579 square feet and a city-determined market value of $8.5 million owned by Jacob Schwimmer. (Market value is typically about 50% of actual value.) The portfolio has $159 million in debt, with top three lenders as S3 Capital, Spruce Capital, and Customers Bank respectively. Within the portfolio, the bulk, or 84 percent of the 111,579 square feet of built space are industrial properties, with residential walkup properties next occupying 16 percent of the space. The bulk, or 84 percent of the built space, is in the Bronx, with Brooklyn next at 16 percent of the space.

Surrounding

Within a 400-foot radius of 260-298 Grand Concourse, Pincusco identified 11 commercial real estate items of interests occurred over the past 24 months.
Of those 11 items, four were in new building development. There were two new building permit applications and two new building permits. The most recent of these four items was a filing on February 28, 2022 for a 192,026-square-foot R-2 building with 240 residential units at 315 Grand Concourse.
One of those 11 items was a sale which Beitel Group bought the 20,480-square-foot, one-unit industrial (F4) on 261 Grand Concourse for $9 million from Nora O’Donoghue on August 25, 2020.
Of those 11 items, six were loans above $5 million totaling $156.8 million. The most recent of the six was Simon Kaufman which borrowed $44 million from BridgeCity Capital secured by the 0-square-foot development site (V1) on 310 Grand Concourse on August 20, 2021.

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