The Gotham Organization, Monadnock Development, and the nonprofit Christian Cultural Center have successfully secured a substantial $315 million construction loan aimed at facilitating a new residential project in East New York, which plans to develop a total of 425 rental units.
This financial backing comes from a mix of various sources. Notably, Red Stone Equity Partners acted as a syndicator, managing to raise $151 million through low-income housing tax credits and brownfield credit equity financing, with JPMorgan Chase providing the funding.
Additionally, New York City’s Housing Development Corporation and the Department of Housing Preservation and Development contributed $260 million. This amount includes $144 million in tax-exempt construction bonds and $116 million in long-term, below-market-rate debt.
The funding secured is specifically earmarked for Phase 1B of the project, which will feature two residential towers along with 12,000 square feet of community space, 10,000 square feet of retail space, and 102 below-grade parking spaces. The estimated completion date for this phase is set for 2027.
The Urban Village initiative, which forms part of Gotham Organization’s broader development strategy, is set to transform a 10.5-acre site in East New York, following a contentious rezoning process in 2016. When completed, the Urban Village project is expected to deliver nearly 2,000 affordable housing units, with a total projected development cost of $1 billion, as highlighted on Gotham Organization’s website.
In a separate financing deal, Vornado Realty Trust has reached a significant milestone by securing a $450 million CMBS loan to refinance the retail space at 1535 Broadway in Times Square, where the company holds a 52% ownership stake in the 109,000-square-foot property.
The loan comes with an interest-only, nonrecourse structure at a fixed rate of 6.9%, set to mature in May 2030. Vornado’s venture partner for this property is Crown Acquisitions, and recent reports suggest that a new deal may soon be in the offing. After covering transaction costs and establishing reserves, Vornado utilized $407 million of the loan to partially redeem its retail joint venture’s preferred equity.
The refinancing was made possible through the investments of several lenders, including Goldman Sachs, Bank of America, and Bank of Montreal. It’s important to note that the commercial space is separate from the adjoining 1,971-key Marriott Marquis hotel, which occupies the upper levels of the property.
Further financial transactions in the real estate market include Hawkins Way Capital, which recently secured a $197.4 million refinancing deal for university dormitory space and retail at 569 Lexington Avenue from Standard Chartered Bank. This transaction, which took place on March 18, replaces a prior $119 million loan from Apollo Global Management.
In another notable deal, JJ Operating, a real estate investment and management firm owned by the Jemal family, facilitated a refinancing of $185 million for four commercial condo units at 278 Eighth Avenue. This transaction, which closed on April 11, replaces $135 million from Cain International, for a recently completed 190-unit residential building in Chelsea.
Additionally, Deutsche Bank, Stateland International, and Tasaba LLC have partnered to offer a refinancing loan of $125.1 million to Princeton International Properties, aimed at rejuvenating a Midtown East office building located at 154 E. 52nd Street. This loan replaces an existing $128 million loan from Blackstone.
Continuing the trend of significant financing, ZD Jasper Realty has secured a $125 million construction loan from iCross Capital for the planned development of a 23-story, 190-unit luxury condominium at 45-40 Vernon Boulevard in Long Island City. The construction is set to occur on the site of the former Paragon Paint Factory, for which ZD Jasper paid $47 million to previous owners Quadrum Global, Baron Property Group, and Simon Development.
Similarly, Citigroup signed a $100 million CMBS refinancing agreement with Chartwell Hospitality for its Marriott New York JFK Airport Hotel at 135-25 142nd Street in Jamaica, Queens. This five-year, interest-only loan will enable Chartwell to pay off existing debt, cover closing costs, and fund enhancements for the 362-key hotel. Arrangement of the financing was facilitated by Ripco Real Estate.
The commercial leasing sector also saw significant activity this week, highlighted by a notable lease signed by law firm Benesch Friedlander Coplan & Aronoff at Paramount Group’s 1301 Sixth Avenue. The law firm has committed to a 90,000-square-foot space, taking up residence on the 34th, 39th, and 40th floors of the 45-story Midtown office building.
Representatives from JLL facilitated the deal for the landlord, while Cushman & Wakefield acted on behalf of the tenant.
In another major renewal, Gerson Lehrman Group, a financial and global information services consulting company, has renewed its 77,000-square-foot lease at Empire State Realty Trust’s One Grand Central Place, a building spanning 1.2 million square feet, originally completed in 1930.
Carolina Herrera Ltd., a high-end fashion house, also made headlines by signing a 34,000-square-foot lease at Empire State Realty Trust’s 501 Seventh Avenue. This agreement marks both a renewal and an expansion for the tenant, which previously occupied just under 30,000 square feet in 2012.
A lease expansion was also announced for Meirowitz & Wasserberg, a personal injury law firm, which has increased its footprint to 24,000 square feet at Skyline Developers’ 1040 Sixth Avenue. The firm originally signed a 5,000-square-foot lease in 2021 and has since expanded to additional space in the building.
On the sales front, Acadia Realty Trust completed a $21 million acquisition for 95 N. Sixth Street in Williamsburg, a 4,000-square-foot building, as part of its ongoing strategy to increase its retail portfolio in the area.
This was closely followed by a $27.5 million deal for the neighboring property at 97 N. Sixth Street. Both transactions highlight Acadia’s strategic push in Williamsburg after previously securing three retail properties in the neighborhood last October.
Meanwhile, SL Green Capital faced a nearly $12 million reduction on the sale of an acquired 13,000-square-foot commercial co-op unit at 85 Fifth Avenue, which previously cost the firm $59 million in 2020. Acadia Realty Trust has purchased the property from SL Green for $46.8 million, generating net proceeds of $3.2 million for the real estate investment trust.
All these transactions, including refinancing deals, new leases, and property sales, serve to illustrate the dynamic nature of New York’s real estate market, where significant activity continues to shape the landscape, demonstrating a positive trajectory towards recovery and growth.
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