All Year faces foreclosure on part of Bushwick apartment complex

An affiliate of Mack Real Estate plans to sell off the interests of the collateral of a $65M mezzanine loan

The Denizen in Bushwick with Mack Real Estate CEO Richard Mack (Google Maps; Getty)
The Denizen in Bushwick with Mack Real Estate CEO Richard Mack (Google Maps; Getty)

Brooklyn developer Yoel Goldman can’t seem to catch a break.

In the past two weeks, Israeli authorities imposed a fine on Goldman’s company All Year Management for providing misleading financial information, and the firm paused its payments to bondholders.

Now, a lender is seeking to foreclose on part of All Year’s trophy asset: The Denizen, a luxury rental complex in Bushwick. An affiliate of Mack Real Estate plans to sell the interests of the collateral of a $65 million mezzanine loan. The collateral consists of the second phase of the 900-unit apartment complex, according to marketing materials reviewed by The Real Deal.

Mack Real Estate Group is planning to sell the interests through a UCC foreclosure sale, set to take place on Feb. 5. The lender tapped JLL to lead marketing.

If the sale goes through, Mack Real Estate or a new investor would take control of the second phase of the residential project. The new owner would still be on the hook for the senior loan payments.

Neither All Year Management nor Mack Real Estate immediately returned requests for comment.

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In recent years, All Year has become one of the more prominent landlords in gentrifying Brooklyn neighborhoods by taking advantage of cheap financing on the Israeli bond market. Its portfolio includes 1,198 multifamily units and 184,179 square feet of commercial space, with properties in Bushwick, Williamsburg and Bedford-Stuyvesant.

Denizen is the company’s largest asset. All Year purchased the two sites that make up the complex — 54 Noll Street and 123 Melrose Street — in 2015 and 2016 for $68.5 million and $72.2 million, respectively. The first phase, at Noll Street, opened earlier this year.

In June 2019, the firm scored $235 million in financing from JPMorgan and Mack Real Estate Group for the second phase of the project.

The company was previously in talks to secure $652 million from Citi Real Estate Group and Goldman Sachs that would largely be used to refinance the Bushwick apartment complex. That deal has not yet closed.

Goldman’s firm has struggled during the pandemic. All Year announced in November that it would be “temporarily halting” payments to bondholders for 30 days, and would be delaying the release of its third-quarter financials.

The company also recently disclosed that it had missed payments on two loans since this summer. This included a $35 million preferred equity investment for a Gowanus development site on Smith Street, and the $65 million mezzanine loan for Denizen.