Jonathan Rose Companies and partner BedRock Real Estate Services will go vertical on their 86-unit Brooklyn Heights rental development after locking down $144 million in construction financing and additional equity from a Chinese institutional partner.
With the foundation already laid at the partners’ Pierrepont apartment project, vertical construction can now begin after the development team brought on the Beijing-based private equity firm JD Capital as a long-term partner.
JD Capital contributed more than $90 million in equity to the project, and the developers secured a $50 million construction loan from Santander Bank, retiring about $28 million of previous debt on the property.
Construction of the 160,000-square-foot 80/20 rental building is scheduled to be completed in about two years.
“There’s a lot of building in Downtown Brooklyn, but there are not a lot of sites in Brooklyn Heights of this size,” Jonathan Rose Companies COO Mike Daly told The Real Deal. “That makes this a great long-term value proposition.”
Construction financing is harder to come by as banks have gotten more skittish about getting into ground-up development. But Daly said that at Jonathan Rose’s typical debt ratio of 40 percent leverage, the deal “is a more conservative loan for a lender.”
The project will comprise of a pair of 19-story buildings facing Montague and Pierrepont streets connected at a two-story base. Most of the units will be family-sized two- or three-bedrooms with full-floor apartments on the tower floors.
Jonathan Rose paid around $57 million between early 2015 and March 2016 to assemble three properties at the site: 181 and 189 Montague Street, and 146 Pierrepont Street.