The Real Deal New York

All Year to issue bonds backed by
Rheingold Brewery site

Yoel Goldman’s firm is looking to raise up to $200M in Tel Aviv to refinance project
By Chava Gourarie | January 22, 2018 06:41PM

123 Melrose Street (Credit: ODA New York)

Yoel Goldman’s All Year Management is looking to refinance its massive Bushwick development at the former Rheingold Brewery site with debt issued in Tel Aviv.

The Brooklyn-based developer plans to offer up to $200 million in bonds secured by a senior mortgage on the first phase of the rental complex, named Evergreen Gardens, according to documents filed on the Tel Aviv Stock Exchange. The proceeds from the bond issuance will replace $140 million of the senior financing on the site and All Year will cap its debt raise at 75 percent of the property’s current valuation, per the documents.

Goldman, who has raised over $500 million in Tel Aviv in 2017 alone, is seeking a 3.75 percent interest rate on the bond. In a similar deal in January 2017, the developer raised $166 million in bonds backed by a first mortgage on the William Vale hotel at a 3.95 percent coupon.

Earlier this month, Moinian Group issued $167 million in bonds at a 3.05 percent, the lowest rate awarded to a U.S. company in Tel Aviv.

The first phase of Goldman’s project, which consists of 443 apartments as well as a retail section, was appraised at $269 million in December with an expected value of $332 million once stabilized, according to a report by appraisal firm BBG. The valuation is based on a 4.25 percent capitalization rate, $11.2 million in net operating income, a $69 million 421a subsidy and a 10 percent appreciation rate over a 10-year period.

All Year expects to complete construction on the first phase in the first quarter of 2018, and begin leasing in the second, according to the documents.

The entire 1 million-square-foot project, at 123 Melrose and 54 Noll streets, was appraised at $432 million and $652 million once stabilized. The two-building development, designed by ODA New York, will include a total of 911 apartments, 131,554 square feet of retail space, an 18,000-square-foot park and a parking structure. All Year has already signed two retail tenants for 22,000 square feet of space, including a 15-year deal with a coffee retailer and a 25-year lease with a boutique supermarket, accords to the documents.

Monthly rents for market-rate apartments in the building are estimated to average $3,325. Rent-regulated units, which comprise 20 percent of the project’s residences, are expected to average $1,040.

Last year, Madison Realty Capital had provided All Year with a $240 million financing package at a 10.5 percent interest rate for the project’s construction.

All Year did not respond to requests for comment.