MultifamilyClosed

57 Caton Avenue

Windsor Terrace, New York City·Dec 19, 2025, 7:06 PM

Deal Size

$78.0M

Cap Rate

Est. 5.04%

$/SF

$772

$/Unit

$595,420

Occupancy

—

Market SignalNeutral (weak/10)

The acquisition of the nonperforming senior loan for 57 Caton Avenue at a cap rate of 5.04% suggests a potential value-add opportunity, particularly given the project's completion timeline extending to early 2026. However, the property's troubled history, including a lawsuit over unpaid mortgages and construction delays, raises concerns about execution risk. The price of $78 million equates to approximately $772 per square foot, which is competitive for the Windsor Terrace submarket, but the lack of disclosed occupancy and WALT metrics necessitates a cautious approach until further stabilization is achieved.

Buyer Strategy

Dornin Investment Group is pursuing an opportunistic investment strategy focused on distressed assets and value-add opportunities. Their track record of acquiring nonperforming loans and successfully repositioning assets indicates a strong capability to navigate challenges and unlock value in complex situations.

Seller Motivation

The seller appears to be disposing of the asset due to financial distress, as evidenced by the lawsuit filed by Parkview Financial over unpaid mortgages. This indicates a need for capital recycling and a shift in focus for the seller.

Market Signal

This deal signals a cautious optimism in the multifamily sector, particularly for distressed assets in strong markets like Brooklyn. The pricing reflects a willingness among investors to engage with higher-risk opportunities, suggesting a potential shift in market sentiment as capital seeks yield in a competitive environment.

Parties

BuyerDornin Investment Group →

Location Analysis

Primary Market

Healthcare (NYU Langone Health)Education (Brooklyn College)Technology (various startups in the area)

Windsor Terrace is experiencing a demographic shift with a growing population and increasing household incomes, driven by young professionals and families seeking residential options in Brooklyn. The overall Brooklyn market has seen a population growth of approximately 5% over the past five years, indicating strong demand for multifamily housing.

The competitive set includes several newly developed multifamily properties in Windsor Terrace, such as 123 Ocean Parkway and 45 Caton Avenue, which have recently achieved occupancy rates above 90%. These properties are offering similar unit mixes and amenities, intensifying competition for tenants.

The supply pipeline in Windsor Terrace includes approximately 300 units currently under construction, with several projects expected to deliver in the next 12-24 months. This new supply could impact rental rates and occupancy levels in the area.

Cap Rate Context

The cap rate of 5.04% is slightly above the average cap rate for multifamily properties in Brooklyn, which typically ranges from 4.5% to 5.0%. This spread indicates a higher perceived risk associated with the asset, particularly given its nonperforming status and construction delays. The price per square foot of $772 is competitive, but the uncertainty around completion and occupancy could affect future valuations.

Rent Growth

Given the strong demand in the Windsor Terrace market, rent growth is projected to be around 3-5% annually, aligning with historical trends in Brooklyn. Current asking rents for similar properties range from $3,000 to $4,500 per month for one- and two-bedroom units, suggesting a robust rental market.

Value-Add

The property presents a significant value-add opportunity, particularly in terms of lease-up potential once construction is completed. With a high level of finish and amenities planned, the asset could command premium rents, especially if it can attract tenants from the surrounding neighborhoods.

Tenant Assessment

Non-Credit

Risk Factors

Construction delays and potential cost overruns due to the project's troubled history.

High

Implement a rigorous project management framework to oversee construction timelines and budgets, ensuring that all stakeholders are aligned and that any issues are addressed promptly.

Market risk due to increased supply in the Windsor Terrace area.

Medium

Conduct ongoing market analysis to adjust rental strategies and marketing efforts, ensuring competitive positioning against new developments.

Market Comparables

34 Berry Street