Brooklyn’s Kingswood Center’s $66M Loan Hits The Market
By Andrew Coen October 23, 2023 6:22 pm
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A $65.5 million loan backing Kingswood Center in Brooklyn’s Midwood neighborhood is up for grabs as part of a distressed loan sale, Commercial Observer has learned.
Yanni Marmarou, managing partner with investment brokerage IPRG, was appointed by the 2nd District Judicial Court as receiver for the collateral of the mixed-use retail and office building at 1630 East 15th Street. The loan sale is commencing four months after Wells Fargo, a trustee for the loan, filed a foreclosure notice on the loan and its sponsor, Urban Edge Properties, The Real Deal reported at the time.
“The loan sale is being prepared to come to market in the next few weeks and should draw attention from a variety of investors and owner-users, due to the unique characteristics of the property’s location and composition,” Marmarou said.
The $65.5 million loan was originated by LoanCore Capital in January 2018 as part of a refinance for the property’s original borrowers, Nightingale Properties and Infinity Real Estate. Nightingale and Infinity sold the property to UrbanEdge in February 2020 for $88.8 million just before the onset of the COVID-19 pandemic, with the new owners assuming the prior debt.
The 129,028-square-foot building, which contains 252 parking spaces, is currently 73 percent leased . The largest tenant, TJ Maxx, has been in Kingswood Center since 2010 and considers the site to be one of its most profitable locations, according to Marmarou. Other tenants include Visiting Nurse Service of New York, ElderServe Health and Mount Sinai’s New York Eye and Ear Infirmary. It has 18,000 square feet of vacant retail space.
The building previously housed New York Sports Club before the company vacated the property in November 2020 — 12 and a half years ahead of its lease expiration — after filing for bankruptcy protection. VTA Management Services also vacated a second-floor office suite in December 2022.
Marmarou, a specialist in selling distressed notes, said no deadline has been set for bids since the foreclosure date is not assigned yet. He noted that the building is one of the largest office property offerings south of Prospect Park, which would enable up to 45,717 square feet of space on a single floor and open the door to possible medical or educational uses.
“Medical groups like NYU, Maimonides and Mount Sinai usually like to consolidate their smaller practices in the market into single locations, as they are easier to manage when they are all under one roof,” Marmarou said. “This building offers that, although it also allows the same ability for charter schools, colleges, religious institutions and other types of nonprofits.”
Urban Edge Properties and Urban Edge REIT, a publicly traded real estate investment trust, were created in 2014 to take on ownership of the majority of Vornado Realty Trust’s former shopping center business.
Officials at Urban Edge and LoanCore did not immediately return requests for comment.
Andrew Coen can be reached at acoen@commercialobserver.com
