BEB Capital and Totem Secure Financing for 187-unit Mixed-Use Development in Brooklyn
March 13, 2024
SK Development also joins partnership team at 737 4th Avenue that will deliver 187-mixed income residences, new ground-floor retail space, and green infrastructure improvements for Brooklyn’s Sunset Park neighborhood
Brooklyn, NY – March 13, 2024 – The partnership team of BEB Capital (“BEB”), Totem, Ofer Cohen, and SK Development, today announced they have secured financing for a 193,000-square-foot, 14-story, 187-unit mixed-income housing and retail development in Sunset Park, Brooklyn. Canyon Partners Real Estate LLC and J.P. Morgan co-originated the $96 million construction financing. Tribeca Investment Group arranged the $25 million investment. Walker & Dunlop secured the financing on behalf of the ownership team.
Upon completion, 737 4th Avenue will deliver 187 residential units to the Sunset Park neighborhood of Brooklyn, comprised of a mix of one-bedroom, two-bedroom, and three-bedroom residences. A total of 46 units will be permanently affordable at an average of 48% of area median income (AMI), one of the lowest AMI averages achieved in the last five years in Brooklyn.
Beyond new housing, the development includes a Community Benefits Agreement (CBA) signed with area community-based organizations including Fifth Avenue Committee (FAC). This agreement will ensure lasting benefits for the neighborhood, such as local jobs, M/WBE contracting, and green infrastructure improvements.
In addition, 737 4th Avenue will include 6,200 square feet of ground-floor retail space, with an executed lease to former tenant Dunkin Donuts for 1,275 square feet. The building will feature state-of-the-art amenity spaces, including a fitness center, game and media lounge, co-working lounge, private dining and entertainment areas, tenant storage, and a roof garden with sweeping views of Brooklyn and New York Harbor.
“We’re thrilled to be partnering with Totem and SK Development to deliver Brooklyn’s latest multifamily project,” said Lee Brodsky, CEO of BEB Capital. “737 4th Avenue presents a blend of state-of-the-art, mixed-income residences, retail offerings, and infrastructure benefits to the Sunset Park community and beyond.”
737 4th Avenue will participate in the 421-a program known as Affordable New York and will benefit from a 35-year tax abatement. The development is located in an Opportunity Zone within Brooklyn’s “enhanced affordability area,” allowing the ownership team to leverage the maximum abatement and enable the most affordable units to be created.
“This project is a reflection of our commitment to community-driven development, and we are proud of our work with local organizations to help secure a myriad of benefits for the neighborhood during the entitlement process,” said Vivian Liao, Principal of Totem. “We have specifically designed 737 4th Avenue to increase affordable housing at one of the lowest AMI averages in years and to create jobs and infrastructure benefits for Sunset Park.”
“At a time when New York City is facing the lowest vacancy rate of housing since 1968, I am proud to contribute to the creation of much needed housing units in this area of Brooklyn,” said Ofer Cohen. “I am fortunate to have worked with the BEB Capital, Totem, and SK Development teams to get to this point and thrilled that the project we started over six years ago is finally getting built.”
“It has been a true pleasure working with BEB Capital, Ofer Cohen, and Totem to bring this project to life. We are also extremely excited to be working on another deal with the teams from Canyon and J.P. Morgan,” said Scott Shnay, Principal of SK Development. “Our mutual commitment to address New York’s need for more affordable housing is exemplified by 737 4th Avenue, offering a best-in-class housing solution to the Sunset Park community.”
“We’re excited to participate in what promises to be a successful project,” said Jonathan Etzion, Partner at Tribeca Investment Group. “737 4th underscores our commitment to working with excellent partners on thoughtful and complex developments that make a meaningful impact in their communities.”
“FAC is incredibly excited that the development team has secured the financing needed to construct 737 4th Avenue, bringing 187 units of housing, including 46 units of much-needed affordable housing, and other amenities to Sunset Park. As part of the land use approval process in 2021, the development team signed a Community Benefits Agreement (CBA) with FAC and 3 other non-profits serving the local community committing to make the 46 units of permanently affordable housing more deeply affordable – in addition to committing to local hiring and sustainability features. The CBA also includes a commitment to set aside space within the building to facilitate future ADA elevator access by the MTA at the 25th Street ‘R’ train and for publicly accessible bike parking, with local bicycle delivery people having preference for spaces,” said Michelle de la Uz, Executive Director of Fifth Avenue Committee. “Totem and their partners’ commitment to working with the community and making this project a reality, especially in this interest rate environment, is greatly appreciated and will help to address the city’s housing crisis.”
Construction on the approximately $143 million project is slated for completion in Fall 2025.
The Walker & Dunlop New York Capital Markets team led by Aaron Appel, Jonathan Schwartz, Adam Schwartz, Keith Kurland, and Michael Ianno acted as the exclusive advisor and secured the financing on behalf of the ownership team.
###
About BEB Capital
BEB Capital is a real estate development and investment firm with a portfolio of industrial, office, and multifamily properties across the Northeastern United States. In addition, the firm has interests in a diverse set of businesses, some of which it owns and operates, and others in which it serves as a limited partner. In 2020, the company launched BEB Lending. This platform provides private, quick, and creative financing solutions for commercial real estate assets in primary and secondary assets across the East Coast of the United States. The firm’s institutional-grade operation and entrepreneurial spirit has allowed the firm to create value by completing several million square feet of value-add industrial acquisitions, multifamily conversions and redevelopments.
About Totem
Totem is a Brooklyn-based real estate development firm that specializes in community-driven projects and innovative design. We build intentional, inclusive developments focused on affordability, economic mobility, innovative partnerships, and regenerative design. Our approach utilizes our team’s deep experience in public policy and private sector solutions to bring about outcomes that expand opportunity in the communities where we work. For more information, please visit https://www.totembrooklyn.com/.
About SK Development
A two-decade-long, father-son partnership between Abe and Scott Shnay —roundtable decision-making enables a bold development vision. “It’s not design by committee,” explains Scott Shnay. “The committee selects the architect, then we trust the architect to design, the same way we trust the contractor to build, and the marketing team to sell or lease in their respective roles.” The result is a portfolio of over twenty development projects in New York, Brooklyn, Queens, Montauk, and the Hudson Valley. For Abe Shnay, “Having worked with my father before, our partnership’s strength consists of being a like-minded family company that shares multi-generational experience and a long-term vision.” As hands-on developers who enjoy all phases of the process, SK plans and programs projects to be well-designed and built, logical, efficient, and attractive to a large customer base. A collaborative team process is integral in achieving quality results: they take as much pride in the execution of their developments as in the forward-looking design outcomes. The partnership has completed some of New York’s most notable boutique developments including 40 Gansevoort Street, home to the fashion house Theory and designed by Morris Adjmi, 10 Bond Street by Annabelle Selldorf, 301 East 51st Street by COOKFOX, and recently completed, 1228 Madison Avenue by Robert A.M. Stern Architects and 547 West 47th Street by Concrete Amsterdam.
About Canyon Partners LLC
Founded in 1991, Canyon Partners Real Estate LLC (“Canyon”) is the real estate direct investing arm of Canyon Partners, LLC, a global alternative asset manager with approximately $25 billion in assets under management. Over the last ten years, Canyon has invested approximately $5.6 billion of debt and equity capital across over 200 transactions capitalizing approximately $21.7 billion of real estate assets, focusing on debt, value add, and opportunistic strategies. With 30+ years of experience, Canyon has established a broad menu of investment capabilities spanning property types, US regions, and project stages (including development, transitional, and distressed/workouts). For more information visit: www.canyonpartners.com.
About Tribeca Investment Group
Tribeca Investment Group is a privately-owned real estate development and special situations investor that transacts across the capital stack with a geographic focus in New York City. For 20 years Tribeca Investment Group has successfully invested over $2 billion in office, hotel, and residential properties. Our investment thesis is rooted in recognizing the highest and best use for each opportunity and maintaining a keen understanding of both user demand and locational growth. We generate consistent deal flow by leveraging our longstanding industry relationships, resulting in opportunities with attractive risk-adjusted returns for its investors.