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Domain Companies Secures $38M in Debt to Finance Gowanus Warehouse Acquisition

The Domain Companies has sealed a $38 million financing package for its purchase of an industrial building in Gowanus, Brooklyn, according to an announcement from HFF, which arranged the financing.

Property records show that the largest share of the debt comes from CIT Bank, which contributed a $25 million floating-rate mortgage to the package. New York City-based Sherwood Equities chipped in a $13 million mezzanine loan, completing a debt package that represented about 80 percent of the $47.5 million purchase price.

“Sherwood Equities’ lending platform was a perfect match for the project given, their appetite for pre-construction New York land loans and comfort with the rezoning of the property,” Christopher Peck, the leader of HFF’s team for the transaction, said.

The 65,000-square-foot building, at 420 Carroll Street, now hosts Alex Figliolia, a plumbing and sewer contractor. But with the Department of City Planning considering a significant rezoning of the historically industrial neighborhood, Domain is eyeing conversion of the site into a mixed-use development that would include housing—including some affordable units, HFF said.

A representative from the contractor declined to comment on whether it had yet spoken with its new landlord.

As the rezoning plans move forward, Domain has been eager to stay ahead of the curve. In December, it bought another warehouse in the neighborhood, at 545 Sackett Street. Matthew Schwarz, Domain’s co-founder, told Crain’s that he hopes to turn that site, too, into a mixed-use development that includes affordable housing.

Plans for the rezoning aim to make the Gowanus Canal the focal point of a reinvigorated and more pedestrian-friendly neighborhood—and the 420 Carroll lot includes about 250 feet of frontage along the waterway, immediately south of the Carroll Street Bridge.

The sale represents an impressive return for previous owner Property Markets Group, which bought the warehouse in 2012 as part of a two-property, $9 million acquisition.

Representatives from Sherwood and CIT Bank did not respond to requests for comment.

 

Source: commercial

While Williamsburg Suffers L Train Problems, It’s LIC’s Time to Shine

Long Island City, Queens, has long been treated like Williamsburg, Brooklyn’s not-quite-ready-for-prime-time little brother.

Both waterfront communities are one stop from Manhattan and have seen great gusts of development since the beginning of the millennium, but Williamsburg has been the pricier, more desirable and cooler of the two. (Even though LIC had a much greater transportation network: eight subway lines, 15 buses and two ferry stations.)

Well, that’s likely to change when the L train takes a 15-month hiatus starting in April 2019 so the Metropolitan Transportation Authority can repair tunnels damaged by 2012’s Superstorm Sandy, real estate professionals say. (The L shutdown will interrupt 225,000 riders that ride the line between Manhattan and Brooklyn daily.)

“A bunch of residents that came to tour our building said ‘Williamsburg and Greenpoint is not for us—my commute can’t suffer [15 months] or longer,’ ” David Brause, the president of Brause Realty, which is completing a 38-story rental tower in LIC, told Commercial Observer.

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The Forge, Brause Realty’s 38-story rental in LIC. Photo: FXCollaborative

As Brause pointed out, “This is not an isolated story.”

Brause is among a fair number of developers and brokers that informed CO of the exodus from Williamsburg to LIC. David Maundrell, Citi Habitats’ executive vice president of new developments for Brooklyn and Queens, said that just this past weekend his office had five people from Williamsburg looking for rentals in LIC.

“It’s really just worrisome to a lot of people that there is no real solution but buses and Uber,” said Eric Benaim, the president, chief executive officer and founder of Long Island City-based Modern Spaces. “In four or five minutes you can be in Midtown Manhattan [from LIC]. And we have great parkland, and there are a lot of things to do here now.”

And he added, “There is obviously a buzz. I get all the time that ‘I’m hearing a lot of good things about Long Island City.’ ”

Another thing pushing residents to the Queens neighborhood: cheaper rents. The average rental unit in LIC was priced at $2,291 per month for a studio and $2,904 for a one-bedroom apartment, according to Modern Spaces’ fourth-quarter 2017 market report. Meanwhile, in Williamsburg it was $2,671 per month on average for a studio and $3,076 for a one-bedroom, according to Citi Habitats’ report for the same period.

And besides price and proximity to Manhattan, this isn’t your grandfather’s LIC—heck, it isn’t even your father’s LIC. There are more than 170,000 residents, 106,000 workers and 6,600 businesses in the neighborhood, according to the local economic development organization, the Long Island City Partnership.

Since 2006 more than 14,100 rental apartments and condominium units have been completed and there are another 19,100 in the planning stages or currently under construction. By 2020, the retail market is poised to more than double in size, adding 508,000 square feet to the current 325,000 square feet.

“Long Island City was once viewed as a location for convenience. Ten years ago you would move to Long Island City because you worked in [the] Grand Central [Terminal area], and you moved to Williamsburg because you wanted to live there,” said Stribling & Associates’ Patrick Smith, a resident of LIC and a residential agent that works in the area. “But what has happened over the course of the past 10 years is Long Island City is now perceived as a lifestyle neighborhood.”

Waterfront parks and good restaurants have sprouted up in the last few years in LIC, including Michelin-starred Casa Enrique and the highly respected Italian eatery Levante; art institutions like MoMA P.S. 1 and the Sculpture Center; two Food Cellar grocery stores and a Duane Reade; fitness facilities such as The Cliffs at LIC and Brooklyn Boulders; and schools, including the expanded P.S./I.S. 78Q and Cornell Tech on Roosevelt Island (which is technically a part of Manhattan, but it’s pretty much in LIC).

And some of the retailers are picking up on the Williamsburg-to-LIC shuffle. The Gutter, a bar and bowling alley that opened in Williamsburg in 2007, opened an outpost in LIC last year. And Sweet Chick, the popular chicken and waffles concept started on Williamsburg’s Bedford Avenue by John Seymour and rapper Nasir “Nas” Jones, announced in November 2017 plans to open an LIC eatery.

“LIC has some great restaurants and places to hang out,” said Helena Durst, a principal at Durst Organization. “It has a very cool vibe to it.”

Durst, in fact, is comfortable making a 765-foot tall bet in the neighborhood. The developer filed plans last July with the New York City Department of Buildings to erect a rental tower at 29-55 Northern Boulevard with 958 units—70 percent of which will be market-rate—and 15,000 square feet of retail. There will also be more than a half acre of open space.

Durst purchased the site in December 2016 from Property Markets Group and Hakim Organization for $175 million. The previous developers were planning a 66-story building at the site, which has a landmarked Clock Tower building with 53,000 square feet of commercial space. The developer is still planning out amenities in the building, but it banks on attracting professionals looking for value.

“We see the residential market continue to grow as people keep getting priced out of Manhattan,” Durst said.

Durst is hardly the only one who’s placing bets in LIC and as the skyscrapers keep rising, developers are trying to one-up each other with their amenity packages.

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Jackson Park will have a rooftop pool and two-acre park. Rendering: Tishman Speyer

“Renters are looking for new products that are highly amenitized,” said Erik Rose, a managing director for residential development in the New York region for Tishman Speyer. “They’ll even move out of buildings that are two and three years old for the latest and greatest.”

Tishman Speyer is expected to complete construction of its 1,871-unit, three-building rental named Jackson Park in LIC at the end of this year. The tallest structure—at 28-34 Jackson Avenue—will rise 53 stories.

The complex surrounds a two-acre private park, complete with dog run, children’s play area, outdoor seating, Ping-Pong tables, barbecue pits and bocce courts (because bocce tournaments are a thing in LIC, Rose said). In addition, there will be a 45,000-square-foot, five-story building with lounges, fitness center, 75-foot pool, sauna and full basketball court.

Brause Realty and Gotham Organization have really turned it up at their 38-story LIC building at 44-28th Purves Street named The Forge. Leasing for the 272 units started in August 2017, and it’s already 50 percent leased. The building comes with 26,000 square feet of amenity space including an outdoor pool (pools, by the way, are commonplace at new luxury LIC rentals), movie screen, hammocks, fitness center, bike storage, residents’ lounge and rooftop lounge with views of the Manhattan skyline and art installations. The building is also feng shui-certified, and the developers are seeking a Leadership in Energy and Environmental Design Silver designation.

Nearby is G&M Realty’s two-building 1,151-rental-unit complex at 22-44 Jackson Avenue. The project includes a 48-story structure and 41-story tower, both at the former site of 5 Pointz, the once-great graffiti complex. Amenities will include bike storage, pet grooming and other pet services, a swimming pool, a game room, a laundry room, a fitness center and a courtyard.

And Rockrose Development Corp. is building a 54-story rental at the former Eagle Electric Factory at 43-22 Queens Street called Eagle Lofts with 790 units. Building highlights: roof decks and 15,000 square feet of interior amenity space for a fitness center, an entertainment lounge, rooftop barbecue areas, a yoga studio, a media screening room, a children’s playroom and a library. And all apartments will come with washers and dryers.

Last April, Rockrose opened a 51-story building with 974 apartments (195 affordable) in LIC at 43-25 Hunter Street called Hayden. It’s already 85 percent leased and has 18,000 square feet of amenities—5,360-square-foot fitness center, full-sized basketball court, billiard room, solarium, yoga studio, Zen garden, media room, children’s playroom, rooftop terraces and all the units have washers and dryers.

The competition for renters is so stiff that landlords are giving away rent to woo tenants.

“You can do a two-year lease with one to three months of free rent,” Smith said. “Some developers are paying brokers’ fees.”

But LIC will be more than just another outer-borough bedroom community. Large mixed-use projects with office and retail spaces are on the way to beef up the office market.

Tishman Speyer is building The Jacx, a 1.2-million-square-foot office and retail building at 28-10 Queens Plaza South, where WeWork has already signed on for 225,000 square feet and Bloomingdales inked a deal for 550,000-square-foot offices.

The Jacx will also include over 50,000 square feet of curated retail space, including a market, food hall, upscale dining, boutique fitness center, 175 bike spaces and an onsite valet garage for 550 vehicles, according to the project website.

Another mixed-use megaproject is the TF Cornerstone-led development in the 4.5-acre Anable Basin inlet section of LIC.

rendering licic While Williamsburg Suffers L Train Problems, It’s LIC’s Time to Shine
TF Cornerstone and its partners are development a mixed-use project in the Anable Basin section of LIC. Rendering: TF Cornerstone.

Alongside partners Greenpoint Manufacturing and Design Center, Coalition for Queens and BJH Advisors, TF Cornerstone was selected by the New York City Economic Development Corporation last July to build it. The two-tower development will feature 1,000 apartments, and one of the two towers will reach 650 feet.

In addition, it will house 400,000 square feet for offices and 100,000 square feet for light industrial use. The plans also call for an 80,000-square-foot public school, a 25,000-square-foot performing arts training facility and 19,000 square feet of retail.

“One of the primary goals of this project is to support the commercial, technology, artisan and industrial businesses of Long Island City, while also balancing that work environment with market and affordable housing,” Jake Elghanayan, a principal and senior vice president at TF Cornerstone, said in a statement when the project was announced. “By providing dedicated space for skilled job training programs, the project will generate a diverse set of economic and employment opportunities for New Yorkers.”   

Most of the Williamsburg folks looking to move to LIC are renters seeking short-term space—for 15 months—while the L train is shut down, according to Smith.

Home buying is a whole other subject. The L train shutdown won’t deter potential homebuyers from plunking down money in Williamsburg if they have the long game in mind, Smith said.

Part of the problem in LIC is a lack of inventory. Until now there was not much in the way of condos in the neighborhood, as most developers took advantage of 421a to build rentals with an affordable component. Nearly 2,800 of the 17,000 units planned in LIC between now and 2020 will be condos, according to Citi Habitats’ Maundrell.

But many condo projects have been announced recently, and Benaim is predicting a shift away from rentals soon.

“I think there is going to be a condo boom probably like by the third quarter of this year,” Benaim said. “We [will be marketing] buildings as small as 12 to 15 units and as large as 800 units.”

That 800-unit condo project at 23-15 44th Drive is called Court Square City View Tower. Developer Jiashu “Chris” Xu’s United Construction & Development Group is building the planned 66-story structure that is slated to rise 984 feet, making it the tallest structure in Queens.

Other LIC residential condo projects include Slate Property Group and Carlyle Group’s 88 unit building at 21-21 44th Drive and the 65-unit 5 Court Square by David Wu.

Condos are already achieving similar pricing to Williamsburg. The average condo in LIC sold for $1.1 million at $1,174 per square foot, according to data from Modern Spaces’ fourth-quarter 2017 report. In Williamsburg on the other hand it averaged $1.2 million at $1,264 per square foot, according to the Citi Habitats report.

“[LIC] has an extremely strong condo market, because there is really no supply and a lot of demand,” Maundrell said. “The demographic that is moving into Long Island City would like to buy but they can’t.”

With all of the new skyscrapers that will be popping up around LIC, one could mistake it for parts of Manhattan—just don’t call it Billionaires’ Row for non-billionaires.

“I wouldn’t call it Billionaires’ Row, because Billionaires’ Row has Central Park to look at,” Maundrell said. “And Billionaires’ Row doesn’t have rental buildings.”

It might not be West 57th Street in Manhattan, and it might not be Bedford Avenue in Williamsburg—but it is something exciting.

Source: commercial

City of Goldman: The Mysterious Developer Who’s Transforming Brooklyn

Standing 23 stories and 250 feet tall, the William Vale Hotel towers over North Williamsburg, dwarfing virtually every other structure in proximity—a fact that affords the hotel panoramic, 360-degree views of New York City from its rooftop cocktail bar, Westlight, which attracts droves of young, sharply dressed New Yorkers who willingly stand in line to sip its $16 cocktails.

One person who, by all accounts, wouldn’t be caught dead drinking at the William Vale is the man who built it.

Yoel Goldman is a member of Brooklyn’s ultra-Orthodox Satmar Hasidic Jewish community—a sect that doesn’t usually go for rooftop outings. But that didn’t stop Goldman and his partner on the William Vale project, Zelig Weiss of Riverside Developers, from knowing that a 183-key luxury hotel on the corner of North 12th Street and Wythe Avenue with a sleek design and the right food and beverage offerings would be a roaring success.

“We can talk about what it is to go to a cool bar and have a cool restaurant, even though he doesn’t spend any time in cool bars at all,” said Eran Chen, the founder and executive director of architecture firm ODA New York and a frequent collaborator of Goldman’s (albeit not on the William Vale). “His feel and understanding of that context, and his thirst for knowledge and information, is huge. I was surprised, and consistently surprised, by his knowledge of what’s going on—what’s cool and what’s hip and what’s done in other places. And that’s been brought to the table in conversations.”

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The William Vale Hotel in Williamsburg.

The opening of the William Vale last year represented a pinnacle for Goldman and his real estate firm, All Year Management. Having spent much of the 2000s gradually acquiring modestly sized multifamily properties across still-gestating Brooklyn neighborhoods like Crown Heights and Prospect Heights—often partnering with equity investors from the Satmar community—Goldman parlayed early success into a buying spree in the years following the financial crisis in 2008. His business plan, according to partners and collaborators, sought to capitalize on plummeted property values and Brooklyn’s promise as a burgeoning residential destination.

“He was one of our top two buyers in the early years of the recovery,” said Marcus & Millichap broker Shaun Riney, who specializes in the Brooklyn multifamily investment sales market. “Most of what he was buying was 20 units and less in these emerging neighborhoods. [All Year was] buying when no one else was buying. They were the ones cutting checks when you couldn’t get financing—when these neighborhoods looked nothing like they do today.”

Gradually, Goldman built a portfolio that now includes no less than 150 properties, the large majority of them residential and in Brooklyn. In the past several years, he’s pivoted toward more ambitious, ground-up projects like the William Vale and a massive residential development on the former Rheingold Brewery site in Bushwick that promises to bring more than 900 new rental units to the neighborhood. Having had the foresight to profit from Brooklyn’s relentless gentrification into a core market, Goldman is now facilitating that transformation as a builder.

In turn, Goldman, who has yet to reach 40 years of age and who one would be hard-pressed to find a photo of online (All Year Management did not return multiple requests for comment for this article), is only furthering his own status as one of New York City’s most active and influential real estate players—a devoutly religious man of modest means whose ambitious plans are reshaping the very face of Brooklyn.

“I think he’s transitioned from a very secure kind of business [as a multifamily landlord] to not only developing but developing new typologies,” said Chen, whose firm is designing the Rheingold Brewery project, as well as Goldman’s under-construction residential tower at 436 Albee Square in Downtown Brooklyn and a planned hotel on Bedford Avenue in Crown Heights.

“He’s attracted to bringing innovations to places that are underestimated and underdeveloped currently,” Chen said. “Anybody can buy land in Manhattan, but to buy 1 million square feet in Bushwick three years ago, when it still is to some degree not a mainstream place for high-end living, was a bold move.”

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The William Vale Hotel in Williamsburg.

To help fund the William Vale and the Rheingold Brewery project, among his other developments, Goldman has issued roughly 1.7 billion shekels, or $485 million, in low-interest, publicly traded bonds on Israel’s  Tel Aviv Stock Exchange. The bonds are backed by a portfolio of All Year’s New York real estate assets—the sorts of cash-generating, income-producing rental and hotel properties that Israeli institutional investors love to buy debt in.

Goldman, likewise, has shown an enthusiasm for the Israeli bond market as a vehicle to raise funds at cheap borrowing costs. With nearly $500 million in debt traded in Tel Aviv, All Year is one of the largest issuers among U.S.-based real estate companies to have completed bond offerings in Tel Aviv—a group that includes the likes of Related Companies, Lightstone Group and Extell Development Co., as well as more modest multifamily landlords like Spencer Equity Group, led by Goldman collaborator and fellow Hasidic community member Joel Gluck.

While not all of Goldman’s real estate assets are tied up in the holding portfolio backing the bonds, roughly three-quarters of them are—and those holdings have a combined equity value of around $480 million and a total asset value of nearly $1.5 billion, according to Israeli financial filings. Goldman does not own all of the assets in their entirety; to the contrary, he has partners on many of them, such as the William Vale. Still, for a man yet to hit 40 years of age, he has managed to build an impressive business out of virtually nothing.

Unlike some in the Hasidic real estate investment community, Goldman did not rely on family connections or inherited funds for his entrée into real estate. Rather, he got his start at a very early age—sometime around his late-teens and early-20s, according to people who have worked with Goldman—through partnering with investors in the Satmar community to acquire and renovate small apartment buildings. (Like many in his community, however, Goldman was also married with children at a young age and by that point trying to earn a living for his family. Goldman’s youngest child was just born earlier this month, according to sources close to him.)

The work could be hands-on, with Goldman often laboring alongside subcontractors on the nitty-gritty of renovating properties. But he was able to stake his claim in the years leading up to the Great Recession, which prompted Goldman into action.

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Rendering of 436 Albee Square in Downtown Brooklyn. Image: ODA

“These are guys who are opportunistic investors—they had a clear vision and saw opportunity and upside,” Derek Bestreich, the president of commercial brokerage Bestreich Realty Group and a former Marcus & Millichap broker, said of working with Goldman and his team at All Year Management. “They were able to take advantage of [the market] well in advance of that vision materializing. They saw the changes happening in Brooklyn and saw where things were going.”

The business model was simple: buy an undervalued building in a not-yet-gentrified neighborhood, fix up and renovate the property, charge higher rents for a better product and, as property values climb, refinance and reap the benefits (though seldom, if ever, sell).

“He was successful at executing his business plan,” Riney said, describing Goldman’s approach as done in the spirit of “If you build it, they will come.”

“They were buying 15 to 20 buildings a year, renovating these properties, refinancing them and doing it all over again,” he said. “As they were buying these properties, the rents were going through the roof. It was the right timing and the right location.”

Bestreich said that around the turn of the decade, Goldman and his associates were “the best buyers” a broker could ask for. “When they wanted something, they would pay the most, and they were the most hassle-free buyers imaginable,” he noted. “They would move really fast and get things done.”

He recalled one Prospect Heights building that “had all sorts of issues” including New York City Department of Buildings violations, cracked plumbing pipes and a crumbling façade. “I walked Yoel and his team through, and they looked at that stuff, but they didn’t acknowledge it,” Bestreich recalled. “He took me outside and said, ‘We’ll pay this price,’ and it was under contract two or three days later.” (All Year Management acquired the building, 690 Prospect Place, for a little over $1 million in 2011, according to city property records.)

“They knew where the market was going. We kicked up deal after deal after deal, and they gobbled it up time and time again,” Bestreich added. “They would pay the most—nobody else was going to pay what they were going to pay—and it turned out to be so true. Nobody knew it at the time, but they were so smart.”

Today, Goldman’s team at All Year and its sister contracting firm, Brooklyn GC, is said to number anywhere from 50 to 100 people—with Goldman’s empire far from a one-man operation.

Sources spoke at length about the caliber and competence of the people who work for Goldman, and they role they have played in building up his business. While many are members of the Satmar community, Goldman is also said to employ those of different religious persuasions in executive positions.

“He’s the head of the organization and the ultimate dealmaker and money guy, but he’s got a great team and network of really smart guys handling everything related to his business,” Bestreich said. “It’s not only him, and he would never say it’s only him.”

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Rendering of 123 Melrose Street in Bushwick. Image: ODA

Talk to those who have known or worked with Goldman and one gets the impression of a charismatic figure for whom real estate is everything. Standing over six feet and decked out in traditional Hasidic garb, words like “presence” and “gravitas” come up when discussing Goldman, as does an appreciation for the man’s acumen and understanding for the way the business works.

“He looks at every single real estate project as a knot that needs to be untangled,” said Gary Katz from alternative lending firm Downtown Capital Partners, a frequent partner of Goldman’s. “He loves looking at a building and seeing how he can get more value out of it. He looks at everything as a problem he can solve.”

Riney described him as “an extremely humble, inquisitive, optimistic, visionary type of dude,” and said he believes intellectual challenges are what drive Goldman as a businessman. “I think people love to work with him. He has a smile on his face at all times and loves doing this—he lights up when he’s talking about [real estate]. It’s an outlet to exercise his mind.”

Goldman’s pivot into the realm of ground-up development was motivated by a couple of factors, sources said, including making the best and most efficient use of All Year’s resources and searching for greater value than could be found in a now-inflated Brooklyn investment sales market.

“If you’re doing a one-off transaction and trying to add 500 units to your portfolio, there are two ways to do it: one big project or you buy 50 10-unit buildings,” Riney said, recalling a conversation he had with Goldman on the matter. “His comment was, ‘I don’t have time to go to 50 closings and deal with 50 brokers and 50 attorneys.’ It’s too much of a headache; they literally have to focus on bigger projects.”

Bestreich noted that, in his estimation, All Year’s move into more ambitious development projects “is not a far-fetched transformation,” but “a logical next step” for a firm that has found its bread-and-butter market oversaturated in recent years.

“They were buying small buildings, renovating them, adding value and carrying out their vision—and then the market started to pick up, a lot of buyers started entering the market and doing the same thing,” Bestreich said. “Prices went up, and it became more expensive, and they weren’t able to do the same deals they were able to do previously. They had to find efficiencies, and that turned out to be in bigger deals.”

Over the past five years, All Year has partnered with Weiss’ Riverside Developers on the William Vale, Joel Gluck’s Spencer Equity on projects including the Albee Square development and, until an acrimonious and litigious split a couple of years ago, developer Toby MoskovitsHeritage Equity Partners on a number of developments, including Moskovits’ Brooklyn Generator office project at 25 Kent Avenue in Williamsburg. (Moskovits declined to comment for this story.)

And in July, The Real Deal reported that Goldman was teaming with Kevin Maloney’s Property Markets Group—the developer of the supertall Steinway Tower on Billionaires’ Row—and the Hakim Organization to acquire a Gowanus development site for $50 million.

In addition to funds raised on the Israeli bond market, All Year also relies on financing from alternative lenders like Downtown Capital Partners and Madison Realty Capital—which earlier this year provided a $270 million construction loan on the Rheingold Brewery project—to fund its operations and activities. Sources said Goldman is happy to accommodate the higher borrowing costs associated with such lenders in exchange for greater flexibility to withdraw funds.

That flexibility enables All Year and Brooklyn GC to pay their subcontractors on time and often finish work ahead of schedule—a commitment to efficiency that, along with a zero-tolerance approach to construction or safety violations, collaborators consider a secret to Goldman’s success.

“He once told me, ‘Gary, on a spreadsheet, [finishing a project early by] three or six months looks like nothing,’ ” Downtown Capital Partners’ Katz recalled. “ ‘But if you finish a rental building in June of 2008 instead of September or October of 2008 [after the onset of the financial crisis], that’s the difference between a profit and a loss.’ ”

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Rendering of 123 Melrose Street in Bushwick. Image: ODA

According to Israeli financial disclosures, Goldman’s assets have only appreciated in appraised value since he first tapped the Tel Aviv Stock Exchange in 2014, as has the cash flow coming into his portfolio as projects like the William Vale and his new rental development at 1040 Dean Street in Crown Heights have come online. The portfolio backing All Year’s Israeli bond issuance features roughly 1,500 operating rental units; factor in Goldman’s assets not included in the portfolio, and that number ranges anywhere from 2,000 to 2,500 total residential units, sources said.

Goldman’s success has not come without controversy, however. In 2015, Crain’s New York Business reported that All Year had attempted to raise rents on tenants at a number of Crown Heights buildings it had acquired in 2014—a move that would have violated Department of Housing Preservation and Development affordable housing regulations. While All Year eventually withdrew the rent increases—telling Crain’s that the hikes were “erroneous”—the episode was portrayed as an example of New York City landlords attempting to skirt rent regulations in search of profit.

In June, housing advocacy group Stabilizing NYC named All Year on its list of 10 “target landlords” that it said had exhibited “predatory” behavior—a list that included the likes of convicted slumlord Steve Croman and notorious property owner Ved Parkash. (Curiously, as of early September, All Year had been removed from Stabilizing NYC’s list. The advocacy group did not return requests for comment on All Year’s inclusion and subsequent removal from the list.)

And there has also been controversy over Goldman’s affordable housing plans for his Rheingold Brewery development at 123 Melrose Street in Bushwick. In June, DNAInfo reported that All Year and fellow Rheingold developer Rabsky Group had backtracked on nonbinding commitments made by the site’s previous owners regarding the number of designated affordable apartments at the development—a decision that would drop the project’s affordable unit count by as many as 88 units.

In addition to the question of affordable housing at the Rheingold project, there is also anxiety over the very nature of the development—one that promises to change the very makeup of the neighborhood via more than 900 new apartments and an innovative, outside-the-box design by Chen’s ODA.

Nearby 123 Melrose Street, Goldman’s friend and fellow Hasidic community member Simon Dushinsky, of Rabsky Group, is planning his own sizable residential development on the Rheingold site at 10 Montieth Street—one also designed by ODA and slated to bring around 500 rental units to market. Work on both projects is underway, and with Goldman and Dushinsky set to bring roughly 1,500 brand new units to the heart of Bushwick in a couple of years, questions have been raised about whether the market will absorb such an influx of supply in a timely manner—particularly at a time when rents have shown marked signs of softening.

“If you look at the very short term, it’s definitely going to be too much, too soon,” Bestreich said of the influx of units promised by the Rheingold developments. “But I do think it’s going to fill in. Real estate is not a quick, short-term game…I’m sure from the outside looking in, maybe it’s too much. But from the inside, I can almost guarantee it’s going to be a very good deal and work out just how [Goldman] expects and wants it to.”

Riney said that, in his estimation, Goldman’s Rheingold plans and his other designs on the city are about taking the next step as a developer and businessman—rather than just putting up more buildings for the sake of it.

“If you meet the guy, he wants the challenge” he said. “He’s someone who is not in need of money; he truly believes he’s now at a level where he can influence an entire area, like a Walentas and Dumbo. He’s looking for bigger swaths of land so he can create something special.”


Source: commercial

Billionaires’ Row Supertall Causes Row–Are Michael Stern and PMG in Trouble?


Source: commercial