L3 Capital pays $20M to ASB Capital for retail in Williamsburg

L3 Capital through the entity L3 127 Kent Ave, LLC paid $20 million to ASB Capital Management through the entity Williamsburg Meridian Kent, LLC for midblock retail building at 127 Kent Avenue in Williamsburg, Brooklyn.
The deal closed on February 28, 2022 and was recorded on March 9, 2022. The property has 5,000 square feet of built space and 10,000 square feet of additional air rights for a total buildable of 15,000 square feet according to PincusCo analysis of city data. The sale price per built square foot is $4,000 and the price per buildable square foot is $1,333 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 seller bought the property on December 5, 2017, for $5.1 million. The signatory for ASB Capital Management was Matthew Brodie Ruland. The signatory for L3 Capital was Domenic Lanni.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer L3 Capital purchased 18 properties in four transactions for a total of $174.6 million and has no record it sold any properties over the past 24 months.
The seller ASB Capital Management had not purchased any other properties and sold one properties in one transactions for a total of $85 million over the same time period.

The property

The 127 Kent Avenue parcel has frontage of 25 feet and is 100 feet deep with a total lot size of 5,000 square feet. The zoning is M1-2/R6A which allows for up to 2 times floor area ratio (FAR) for manufacturing and up to 3 times FAR for residential with inclusionary housing. The city-designated market value for the property in 2022 is $1.3 million.

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 February 25, 2022. 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 Williamsburg, the bulk, or 35 percent of the 65.1 million square feet of built space are residential elevator buildings, with residential walkup buildings next occupying 19 percent of the space. In sales, Williamsburg has the 9th highest sale turnover among other neighborhoods in the city with $1.4 billion in sales volume in the last two years. For development, Williamsburg is the 6th most active neighborhood among other neighborhoods. It had 5.1 million square feet of commercial and multi-family construction under development in the last two years, which represents 8 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of 13 of the 24 commercial properties representing 77,385 square feet of the 112,885 square feet. The largest owner is Bruce Ratner, followed by L3 Capital and then Afshan Shariati. There are six active new building construction projects totaling 62,752 square feet. The largest is a 18-unit, 43,004-square-foot R-2 building developed by Domenic Lanni with plans filed November 30, 2021 and it has not been permitted yet.The second largest is a 4,325-square-foot retail (M) building developed by Domenic Lanni with plans filed November 20, 2020 and it has not been permitted yet.

The majority, or 32 percent of the 122,260 square feet of built space are residential elevator buildings, with mixed-use buildings next occupying 27 percent of the space.

The seller

The PincusCo database currently indicates that ASB Capital Management owned at least one commercial property with 28,964 square feet and a city-determined market value of $17.2 million. (Market value is typically about 50% of actual value.) The portfolio consists of at least a single retail property. It is located in Manhattan.

The buyer

The PincusCo database (which is not complete) currently indicates that L3 Capital owned at least 34 commercial properties with 220,520 square feet and a city-determined market value of $82.2 million. (Market value is typically about 50% of actual value.) The portfolio has $229.8 million in debt, with top three lenders as JPMorgan Chase, Ladder Capital, and Hanmi Bank respectively. Within the portfolio, the bulk, or 58 percent of the 220,520 square feet of built space are mixed-use properties, with retail properties next occupying 30 percent of the space. The bulk, or 80 percent of the built space, is in Brooklyn, with Manhattan next at 20 percent of the space.

Surrounding

Within a 400-foot radius of 127 Kent Avenue, Pincusco identified 16 commercial real estate items of interests occurred over the past 24 months.
Of those 16 items, one was in new building development. It was a new building permit application filed on November 30, 2021 for a 26,936-square-foot R-2 building with 18 residential units at 133 Kent Avenue.
Of those 16 items, three were for major renovation including a certificate of occupancy change. They were one permit applications with a total initial cost of $1.9 million, one permit with a total initial cost of $315,000 and one initial temporary certificate of occupancy issuance for a project that initially costed $1.4 million. The most recent of these three items was the permit on January 26, 2022 for a 48-square-foot R-3 building with two residential units at 155 Wythe Avenue.
Of those 16 items, four were sales above $5 million totaling $92.9 million. The most recent of the four was Michael Weitzman which bought the 25,000-square-foot, 16-unit mixed-use building (K4) on 135 Kent Avenue for $7.5 million from Jeffry Cohen on August 19, 2021.
Of those 16 items, eight were loans above $5 million totaling $343.6 million. The most recent of the eight was Michael Weitzman which borrowed $6 million from Spruce Capital secured by the 25,000-square-foot, 16-unit mixed-use building (K4) on 135 Kent Avenue on August 19, 2021.

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