The Real Deal New York

Related making play for CitiStorage site in Williamsburg: report

Loan would give Hudson Yards developer option for future ownership stake in property

December 29, 2015 02:42PM

Related CitiStorage

From left: Jeff Blau and Norman Brodsky

Related Cos. is reportedly in discussions to invest in the 11-acre CitiStorage development site on the Williamsburg waterfront in Brooklyn.

The Hudson Yards developer, led by founder Stephen Ross and CEO Jeff Blau, is negotiating with Midtown Equities and East End Capital to provide a loan to one of the owners of the site.

The agreement would enable the three investors to potentially convert the debt from the loan into an ownership stake in the property, according to Crain’s. Midtown Equities and East End Capital reportedly teamed to secure an option on the property earlier this year.

Neither the size of the loan provided by Related, nor the developer’s eventual ownership interest in the site, which is believed to be worth at least $250 million, were specified. Sources said the structure of the deal has yet to be finalized. The site spans nearly two full blocks along the East River at North 11th Street.

“There’s no deal in place at this time,” Norman Brodsky, one of the CitiStorage site’s owners, told Crain’s. “But I’m exploring all my options to refinance or sell.”

Brodsky would use proceeds from the loan to buy out current partners, such as investment firm Ares Management, and prepare the parcel for development while remaining a partner in the project.

The appearance of a major player like Related could be the boost needed to get the long-delayed project off the ground.

Related, Midtown Equities and East End Capital can build nearly 600,000 square feet of office and retail space under the site’s current zoning – an attractive proposition for builders as commercial tenants have expressed increased interest in Brooklyn neighborhoods like Williamsburg.

Brodsky was reportedly looking to sell the site for $500 million back in April. [Crain’s]Rey Mashayekhi