New owner to bring stalled South Slope condo back to life as rental

Mar.March 01, 2012 12:00 PM

A stalled Brooklyn development site at 683 Fourth Avenue in South Slope is coming back to life two years after a 16-unit condominium project by local developer Isaac Katan stalled due to lack of financing, according to the site’s new owner, Greenwood on Fourth LLC.

Greenwood, led by New York-based developers Nick Malafis and Ioannis Glyptis, who also recently completed a 26-unit rental at 433 Third Avenue in Gowanus, is planning to revive the plans by Katan for the building, between 21st and 22nd streets, but has scrapped the condo model in favor of rentals.

“We feel that the rental market for apartments is very strong and this seemed like a good opportunity to add some more rental units in the neighborhood,” Malafis said, adding that the company will likely break ground on the site before the middle of March. “The condo market remains very soft. It’s difficult to get financing for condo projects, so the driving force was definitely the robust rental market.”

Greenwood, which has formed an equity partnership with Manhattan-based Marathon Bank of New York for the project, said the majority of Katan’s original design and vision for the building, which dates back to 2006, would remain intact.

“It will be very close to that,” he said, confirming that the units would all be one-bedroom.

Rents for the property will be around the mid-$40s per square foot, Malafis added, in keeping with other rental projects in the neighborhood.

Greenwood bought the property with approved plans in place for a total of 15,088 buildable square feet in December; the lot had a 421-a tax abatement in place. Commercial brokerage TerraCRG brokered the $1.2 million deal on behalf of the buyer and seller.

“The complete foundation in place definitely added a premium to the purchaser’s price. Builder’s in today’s market are willing to pay extra for shovel ready sites especially with a 421-a abatement in place,” said Peter Matheos, an associate at TerraCRG, one of the brokers involved in the transaction.

Katan said the site, which stalled for two years, had not moved forward because of a lack of financing.

“[Financing] is the bottom line here,” he said, adding that he’d opted to sell the lot three months ago because it was “too small a project” for him at the moment.

Meanwhile, Greenwood, which completed the Gowanus project nine months ago, said the building was 90 percent leased just one month after completion, confirming that the Brooklyn rental market was as hot as they’d anticipated.

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