Monday, July 23, 2012

Breaking Ground in Prospect Heights (Again): 494 - 504 Sterling Place

On Platinum Member radar since last Fall, when it was heading to foreclosure auction with a lien of $1.6M, 494 - 504 Sterling Place is a huge vacant lot on the edge of Prospect Heights and Crown Heights with a ton of frontage and some 40,000 - 60,000 buildable square feet.  Not a bad look down the block from a project like this, and across the street from $500-$600/sqft condos.  The going buildable square foot rates we were given by experienced commercial brokers would value this lot at $2.2M - $3.3M.  These lots have been trying to do something for a long time now, with applications going back to 2003.  Now it looks like they're finally breaking some ground (again)...

Previous owners 500 Sterling Realty Corp. filed for bankruptcy in Florida just in time to stay the foreclosure auction set for December 2011.  Among the previous owners was this unsavory-sounding character Eliyahu Ezagui who was sentenced to 33 months in prison earlier this year for "fraudulent mortgage schemes" on buyers and lenders.  Dude was also found guilty of stealing $18M 2 years ago.  Among the lenders in this case appeared to be Seaway Capital, who picked the lots up at the next foreclosure auction on 3/8/12, closing a month later, for $5,000 - or "the highest sum bid at the sale".  Granted, it'd take some $8M-$10M+ to build this out to its max capacity, and we're told there's no construction financing now for condo sales, only rentals.  However, we still find it hard to believe that no one legitimately given a chance would bid 5,000 and 1 dollars (or more) to land such a huge property with so much potential.  But who knows how/why the auction went down the way it did and what other liabilities are at play?  Now the previously-approved plans for the lots got amended this month, and there's been some renewed activity.  We'd heard the lots are now destined for "religious housing".  When we asked a commercial real estate broker somewhat familiar with the case, "What religion?" - he said, "Come on!"

Pro's:  location, potential, size, price?

Con's:  takes deep pockets to execute, financing is tough, hairy deal to sort through, gone already

Ideally:  interesting to see what happens here.  Hopefully something in line with the neighb' gets done this time around.

1 comment:

  1. Sale recorded this month at $5.95M. We're told it was $6.5M, or $150/bsf.