The Real Deal New York

Chetrit, Somerset seeking $500M loan for Bronx megaproject

Financing would be among largest ever for private resi development in the borough
By Mark Maurer | Twitter_logo_blue copy March 30, 2017 07:00AM

From left: Joseph Chetrit, 101 Lincoln Avenue and Keith Rubenstein (Credit: Hill West Architects via YIMBY and Getty Images)

They’re building among the most ambitious projects the Bronx has ever seen. And the financing they’re seeking will likely set a new record for the borough.

The Chetrit Group and Somerset Partners are in the market for a construction loan of up to $500 million for a seven-building, 1,300-unit rental complex in Mott Haven, The Real Deal has learned. The South Bronx complex is slated to cost over $600 million, according to Somerset’s TRData LogoTINY Keith Rubenstein, with the partnership team set to cough up between $100 million to $150 million in equity.

Sources said the developers are targeting domestic lenders and hope to secure either a mezzanine loan, first mortgage or preferred equity. Maverick Commercial Properties’ Adi Chugh and Iron Hound Management Company’s Robert Verrone are jointly handling the search for the financing. Chugh declined to comment, and neither Verrone nor Chetrit could be reached.

The developers plan to break ground on the site in the next month even if the loan isn’t in place by then, Rubenstein said.

The complex will consist of three buildings – two rising 25 stories and one 16 stories – at 2401 Third Avenue, and four buildings – three rising 24 stories and one 22 stories – at 101 Lincoln Avenue. The construction will proceed in two phases and is slated to wrap up in late 2019.

The Chetrit Group, headed by Joseph Chetrit, pulled off a $135 million loan from Bank of the Ozarks and Melody Finance for Brooklyn’s tallest tower at 9 Dekalb Avenue — in partnership with JDS Development Group — and a $194 million loan package from Acore Capital and SL Green Realty for a Financial District condominium conversion at 49 Chambers Street.

The Bronx has rarely, if ever, seen a construction loan exceeding $200 million, let alone a development of this scale. Last year, Taconic Investment Partners and Clarion Partners got $110 million for the Eastchester Heights complex and the Morgan Group got a $148.6 million refinancing for 21 rental buildings.

The Bronx saw a record $3.3 billion in real estate investment in 2016, with over 14.2 million square feet of development hitting the borough, according to Bronx Borough President Ruben Diaz Jr.