Developer Kushner Companies expanded its debt book this week by lending $24.5 million to Keith Rubenstein’s Somerset Partners on two Bronx development sites.
The land loan covers 9 Bruckner Boulevard, where Somerset plans to convert a warehouse into a food hall, and 2413 Third Avenue, part of a larger Mott Haven development site where Somerset will team up with Chetrit Group for a multi-building, mixed-use residential project. The developers are still in need of a much larger construction loan.
Iron Hound Management’s Robert Verrone and Robert Vernicek brokered the debt.
Over the last year, Kushner Companies has lent modest amounts to a growing number of developers in New York City. Last year, CEO Laurent Morali announced that the company intended to step up its lending to total $200 million per year for the next five years. Previous loans include a $33 million loan to Heritage Equity Partners for a Bushwick office development and a $57.5 million note on Chetrit and JDS Development’s 9 Dekalb Avenue supertall project in Brooklyn.
In 2015, Somerset Partners caught heavy flack for throwing a “Bronx is Burning“-themed party at Its Third Avenue development site, a fiesta that featured burning barrels and bullet hole-pocked cars. Many criticized the developer for trivializing the borough’s ongoing struggles with poverty and violence.
Chetrit and Somerset are still looking for a $500 construction million loan needed to pull off the the full plans for their remaking of Mott Haven, which could bring as many as 1,500 new residential units to the Bronx.
Although Kushner Companies is happy to finance other developers’ projects, its having a hard time getting backing for its own ambitious plans. Bloomberg reported last week that the company has searched the globe for the capital it needs to convert its flagship property, 666 Fifth Avenue, into an uber-luxury supertall condo. Anbang Insurance Group, Sheikh Hamad bin Jassim Al Thani of Qatar and the South Korea’s sovereign wealth fund are just a few of the investors to pass on the project.