Ismael Leyva and a rendering of his planned tower at 85 Flatbush Avenue ExtensionA $17.3 million judgment on two loans provided to the North Development Group to finance part of an Ismael Leyva-designed high-rise tower at 85 Flatbush Avenue Extension in Downtown Brooklyn were put on the market this month. Brooklyn-based North Development Group, led by developer Isaac Hager, planned to build a 21-story, 108-unit residential condominium tower at the vacant site at the triangle-shaped intersection of Flatbush Avenue, Tillary Street and Duffield Street, city Department of Buildings records show, but the project stalled. Lender U.S. Bank filed to foreclose on the loans in 2009, and a Brooklyn State Supreme Court judge signed the foreclosure judgment last year in November, court records show. [more]

W Financial President Gregg Winter and 20 Bayard

After settling a two-year-old bankruptcy case at 20 Bayard in Williamsburg, senior lender W Financial Fund has sold the unsold shares, which include 37 vacant apartments, to Brooklyn investment firm Fortis Property Group for $25 million, according to the lender.

After settling the bankruptcy case with developer Isaac Hager, president of North Development Group, the lender was planning to take over the project, but was blown away by an unsolicited offer from Fortis.

“The idea was that we would own the remaining apartments,” W Financial President Gregg Winter said. “At last second as we were preparing to close a week and a half ago, we were approached by [Fortis], [who was] fervently interested in buying our interest.” [more]

In their first official response to the bankruptcy filing of 20 Bayard, lawyers for W Financial Fund last week urged a U.S. Bankruptcy Court judge to reject a motion by developer Isaac Hager to continue operating the Williamsburg condominium with monthly rent and parking fees. Hager, president of North Development Group, threw the 64-unit condo into bankruptcy last month, when he was unable to make a $170,000 interest payment to W Financial, or refinance a $17.4 million bridge loan. In a Dec. 9 filing, Martin Ehrenfeld, restructuring officer for the developer, asked permission to use the rent and parking fees to cover monthly maintenance charges for at least 120 days until a reorganization plan is worked out with creditors. After selling 24 apartments before the real estate market collapsed in 2008, Hager rented out nearly all of the remaining units until the condo market recovered. According to the court documents, 20 Bayard has $1.28 million in net operating income per year. [more]

20 Bayard (right)

After months of trying to keep his Williamsburg condominium project afloat on rental income, developer Isaac Hager threw 20 Bayard into bankruptcy after he was unable to refinance the building loan or support the building’s monthly debt with outside funds, according to court documents obtained by The Real Deal. According to an affidavit filed in U.S. Bankruptcy Court by Martin
Ehrenfeld, director of sales and marketing at North Development and
restructuring officer of 20 Bayard Views LLC, the entity that controls
the condo, Hagar was unable to refinance a $17 million mortgage loan
from Manhattan-based lender W Financial Fund. He was also unable to
make a $170,000 interest payment and $85,000 extension fee that would
have extended the loan until Jan. 13, 2010.
[more]

20 Bayard

In a move that stunned real estate executives and residents of the
building, the sponsors of 20 Bayard Street in Williamsburg filed the
condominium into Chapter 11 bankruptcy protection late this
afternoon. According to documents filed in U.S. Bankruptcy Court in Brooklyn, the
condo by North Development Group owed more than $10 million to more
than 50 creditors. The reason for the filing was unclear, however bankruptcy is often
used by developers to prevent a property from being foreclosed on.
Records with the city Department of Finance show that Istar Financial
inherited the building loan from subprime lender Fremont Bank.
However, court documents show that Manhattan-based hard money lender W
Financial among the listed creditors. The creditor with the largest unsecured claim was Add Plumbing, a
contractor at 120 Evergreen Avenue in Brooklyn. The claim was for
$325,000. [more]

189 Bridge is now partly rental

From the November issue: Like many other development firms, the Clarett Group rode the wave of
the real estate boom expertly, building successful condos in Manhattan
and other markets across the country. Like a host of other developers,
however, the company hit a damaging riptide in Downtown Brooklyn. A few
months ago, Clarett’s condo, the Forté, went back to its lender,
Eurohypo AG. The move was the most boldface example thus far of the
difficulties developers have encountered selling condos in Downtown
Brooklyn, generally defined as the section of the borough bounded by
Nassau Street to the north, Ashland Place to the east, Schermerhorn
Street to the south and Court Street to the west. That catch zone
encompasses several micro-neighborhoods, including the western edge of
Fort Greene. Several big developers are feeling pain in the saturated
area, which has been generating a lot of attention lately because three
new luxury rental towers are preparing to launch. [more]