It has been about nine months since Ronel Ben-Dov took over beleaguered Brookland Capital, and the New Jersey landlord is unsparing in his assessment of how the development firm was previously managed.
“I don’t think the company was run correctly and efficiently at any point in time,” he said, “and the company took very high loans, and they didn’t work.”
Ben-Dov has been largely quiet since assuming control of Brookland but spoke to The Real Deal about his plans for the company amid its recent string of financial difficulties. His main focus is on liquidating the firm and making sure its bondholders and creditors receive as much of what they are owed as possible, he said.
“We’re trying to get the maximum to everybody — to all the creditors, bondholders and banks,” he said.
Before its recent struggles, Brookland — founded by Boaz Gilad — was one of the most prolific developers in Brooklyn and a pioneer of raising money on the Tel Aviv Stock Exchange. But a string of setbacks in 2018 led to Gilad resigning from an affiliated holding company early this year under pressure from bondholders.
Gilad did not respond to a request for comment but told TRD at the time of his resignation that Brookland was still “alive and kicking.” He also emphasized that he had only quit his position at the holding company, not at Brookland Capital itself.
However, he recently posted on LinkedIn that he had taken a new job as vice president of FM Home Loans in Brooklyn and founded the Amast Group in July. Ben-Dov confirmed that Gilad no longer has ties to Brookland.
“He has no role,” Ben-Dov said. “He’s not communicating. He’s not involved.”
Brookland is seeking buyers for several of its properties to help pay its debts, but Ben-Dov said the firm was not desperate enough to accept any offer. Its recent transactions include selling 257 Washington Avenue in Clinton Hill to developer Serabjit Singh for $13.5 million and unloading the remaining condos at 554 4th Avenue in Park Slope to Spruce Capital Partners for almost $30 million.
“I don’t think there is any asset that we sold under the real economic value,” Ben-Dov said.
He is also renovating some of Brookland’s properties to get a better sales price, and is keeping a management team in place in case tenants experience any maintenance issues, according to Ben-Dov.
“We are taking care of them,” he said of Brookland’s remaining projects. “Actually, we improved the existing buildings significantly since we took over.”
One source familiar with Brookland’s struggles, who spoke on the condition of anonymity, said that several of the company’s projects were still in good shape and could fetch favorable prices.
However, it will likely not be enough for the company’s bondholders to be repaid in full, he said.
“It would be pretty tough for them to recoup the face value of their initial investments,” said the source.
The firm is facing several lawsuits, mostly from contractors who allege they have not been paid for work completed on Brookland projects.
Ben-Dov was sanguine about the suits, saying he had appointed a lawyer to handle them and would work to resolve them as soon as he could.
“There are a lot of lawsuits,” he said, “and we are dealing with all of them.”
Real estate attorney Joshua Stein said it was unclear whether Ben-Dov would be able to pay back Brookland’s creditors and bondholders. It would likely depend on how methodically the firm sells its assets and what value it gets for them, he said.
“If you can do an orderly sales program as opposed to a fire sale liquidation or a bankruptcy, I think you’re more likely to come out ahead,” he said. “The fundamental problem, probably, is that values in general have dropped, and that’s one of the risks of real estate: Values go up and values go down.”