The Sale of 65 Kent Avenue, Williamsburg, Brooklyn, NY

Deal Highlights

We are proud to announce the sale and acquisition financing of 65 Kent Avenue, a 4,350 SF mixed-use building in Williamsburg, Brooklyn, for $5,500,000 ($1,264 per square foot). The property is located on the corner of Kent Avenue and North 10th Street, directly across the street from Bushwick Inlet Park on the Williamsburg waterfront. Featuring a restaurant space on the ground floor and two floor-through apartments on the upper floors, the sale price equates to $1,800,000 per unit.

Seller Profile

The seller is a private equity fund who acquired the property as part of a 100+ asset portfolio that was previously in distress. They were a price-motivated seller, having agreed to transact if pricing aligned with our original underwriting.

Buyer Profile

The buyer was Kokomo, the existing restaurant tenant occupying the building’s ground floor. Kokomo is one of NYC’s highest rated Caribbean restaurants with a years long track record of success. 65 Kent Ave was their first CRE acquisition.

Challenge: Negotiating With An Existing Retail Tenant

While the building’s commercial tenant was always considered a likely buyer, negotiating with a single purchaser rarely works in the seller’s favor. It was imperative that we establish market value and maintain momentum through closing.

Solution: Leveraged Competition

We ran a comprehensive marketing campaign, generating several offers from reputable buyers in the local market. This effectively established value and created a competitive environment to ensure highest price and drive toward execution.

Challenge: High Offer Required High LTV Financing

Though the retail tenant’s offer came with a higher purchase price than the rest of the market, they required a high LTV acquisition loan to execute at that number.

Solution: Connected Buyer With Matthews Capital Markets

The key to this transaction was connecting the purchaser with Matthews™ Capital Markets partner Brian Brady. Bryan is an expert with SBA financing and he worked tirelessly to secure a 90% LTV SBA 504 loan for the purchaser, and consequently, a closing for the seller.

Challenge: Certificate of Occupancy Concerns

The property had a Temporary Certificate of Occupancy (TCO) at the time of closing. While this isn’t typically a significant concern, the purchaser’s SBA loan required additional assurance that a Permanent Certificate of Occupancy (PCO) could be obtained post-closing.

Solution: Remain Solution Oriented

Throughout the contract phase, we were in constant communication with the architect responsible for obtaining the permanent certificate of occupancy, pushing the process along. In the end, we were successful in providing a level of certainty that satisfied the lender’s requirements.

Outcome

By leveraging market competition and in-house capital markets expertise, we secured a final sale price of $5,500,000 – well above the next highest offer. The seller achieved an exit at maximum value, and the purchaser achieved long-term stability for their business in a rapidly evolving submarket.

Financing Highlights

Overview

In February 2025, we successfully closed a $5,000,000 loan facilitating the acquisition of a mixed-use retail/multi-family property in the vibrant Williamsburg neighborhood of Brooklyn, NY. The property was previously owned by a private equity firm that had acquired it through the bankruptcy proceedings of All Year Holdings. This transaction was a prime example of how strategic financing solutions can enable small business owners to transition from tenants to property owners.

Key Stakeholders

• Buyers: Entrepreneurial restaurant owners and community leaders
• Sellers: Private equity firm
• Brokers: Bryan Kirk and DJ Johnston, Manhattan Office, Matthews Real Estate Investment Services™
• Financing Advisor: Matthews Real Estate Investment Services™

Challenges

1. High Loan-to-Value (LT) Requirement: The buyers sought a 90% loan-to-value ratio for the acquisition.
2. Limited Real Estate Experience: The buyers had no prior commercial real estate ownership experience.
3. Busy Entrepreneurs: The buyers were actively managing their business and community responsibilities.
4. Post-COVID Recovery: The buyers opened their restaurant shortly after COVID-19 restrictions significantly impacted the hospitality industry.
5. Incomplete Documentation: The seller had not secured a Permanent Certificate of Occupancy (PCO).

Opportunities

1. Prime Location: A warehouse across the street was slated for redevelopment into a city park, enhancing the property’s long-term value and offering skyline views of Manhattan.
2. Business Resilience: The buyers had successfully navigated and recovered from the challenges posed by COVID-19.
3. Financial Readiness: The buyers possessed the necessary assets to cover the equity injection and maintain sufficient reserves.
4. Vision for Growth: The buyers had a clear growth strategy and were committed to long-term investment.

Solution

Given the buyers’ position as the primary tenant (leasing more than 50% of the gross leasable area) and their financial capability, we identified the SBA 504 loan as the ideal financing vehicle. This loan structure allowed for lower equity requirements while offering competitive long-term fixed rates.

1. Initial Consultation & Preparation

• Met with buyers in June to outline the SBA financing process and documentation requirements.
• Provided ongoing coaching to ensure all necessary paperwork was prepared accurately and promptly.

2. Securing Financing

• By July, the buyers and seller had executed a purchase and sale agreement.
• Drafted a comprehensive debt memorandum and coordinated with a Certified Development Company (CDC) to secure the subsidized second lien.
• Shopped the proposal to over a dozen banks and obtained three competitive term sheets.

3. Optimal Loan Terms

• Selected a lending partner offering a 7.0% rate, below the prevailing SBA bank rate of 7.5%.
• Anticipated a blended debt cost of approximately 6.625% once the CDC funded its portion, 50 basis points lower than initial expectations.

Overcoming Obstacles

The primary challenge arose from delays related to the Certificate of Occupancy, extending the closing timeline by approximately 45-60 days. Despite these hurdles, the investment sales brokers played a crucial role in maintaining alignment and motivation among all parties.

Outcome

In February 2025, the buyers officially closed on the acquisition, securing a generational asset for their family business. This transaction not only allowed an immigrant family to transition from tenant to owner but also strengthened their foothold in the thriving Williamsburg community. Through strategic advising, diligent underwriting, and collaborative efforts, we successfully delivered a tailored financing solution, empowering our clients to achieve their ownership goals while securing favorable long-term debt terms.