New York state housing officials are getting ready to provide $270 million in financing for Rockrose Development’s 974-unit rental project in Long Island City.
“Historically, you haven’t seen a lot of 80/20 in the outer boroughs,” Rockrose President Justin Elghanayan told The Real Deal. “What’s happening now is that Long Island City and other areas are getting so desirable to live in that the market-rate rents have gotten to the level [where the program makes financial sense].”
The state Housing Finance Agency is set to vote later this month on a proposal to provide Rockrose with a $270 million first mortgage on the planned towers – one 14 stories and another 50 – in the neighborhood’s Court Square section at 43-25 Hunter Street. The loan will be financed through of a mix of tax-exempt and taxable bonds to be purchased by Wells Fargo and a consortium of other banks.
Rockrose, in turn, will set aside 20 percent of the apartments – or 195 units – for renters earning up to 60 percent of the area median income for a period of 30 years. This will be the developer’s first 80/20 project outside of Manhattan.
Market-rate rents in the building will average $53 per square foot, a marked increase from the low-$40-figure Rockrose proforma-ed the nearby Linc LIC rental tower the company began building in 2010, Elghanayan said.
Long Island City in general is booming with large rental projects and developers are particularly interested in the Court Square area, which has strong transit connections to Manhattan. Rockrose alone has 2,500 units in the pipeline for the area.
The Hunter Street project is expected to cost $531 million to develop, inclusive of land-acquisition and soft-development costs, according to HFA documents. Rockrose will put up just less than half of that figure in equity, a combination of cash and the value of the land.
Before Rockrose split into two separate firms – Rockrose and TF Cornerstone – in 2009, the company had developed several 80/20 projects in Manhattan, but the Hunter Street development marks the first for Rockrose outside the borough.