The Real Deal New York

These were the top outer-borough real estate loans in December

The top spot went to a $217M loan for Empire Stores
By Eddie Small | February 09, 2018 08:00AM

Clockwise from top left: Empire Stores, Industry City, Dime Savings Bank and the Williamsburg Hotel 

The biggest outer-borough loan of December took place right along Brooklyn’s waterfront on the aptly named Water Street.

The $217 million loan from M&T Bank and the Brooklyn Bridge Park Development Corporation to Midtown Equities for its Empire Stores project took the No. 1 spot on December’s list of loans in the outer borough, followed closely by Bank of China’s $196 million loan for Industry City. Other large loans for December included $150 million for the Dime in South Williamsburg and $92 million for the Parkline in Prospect-Lefferts Gardens.

Brooklyn’s presence on the list was extremely dominant, nabbing eight of the top 10 spots, while Queens and the Bronx each only had one loan apiece, and Staten Island had zero. The full list of top 10 loans for December is as follows:

1. Empire State of Mind — $217 million

M&T Bank and the Brooklyn Bridge Park Development Corporation loaned Midtown Equities, Rockwood Capital and HK Organization $217 million for Empire Stores at 55 Water Street, taking the top spot for biggest outer borough loans in December. The loan consolidates and replaces $117 million in prior financing from BBPDC and includes a new gap mortgage for $101.3 million, a project loan for $9.1 million and a building loan for $18.5 million. The complex consists of seven warehouses that were converted into retail and office space and reopened in 2016.

2. Bright Lights, Industry City — $195.6 million

Bank of China took the No. 2 spot with a loan to the owners of Industry City for just under $196 million, which was split into two mortgages: one for about $133 million and the other for about $63 million. The owners received about $48 million in mezzanine financing as well. The owners applied for a rezoning last year to move forward with a planned $1 billion redevelopment of Industry City that would grow it from 5.3 million to 6.6 million square feet, and they plan to use the loan for redevelopment and leasing costs.

3. Brother, Can You Spare a Dime? — $150 million

Tavros Development Partners and Charney Construction and Development received a $150 million loan from Square Mile Capital Management for the Dime at 263 South 5th Street in Williamsburg, one of the neighborhood’s tallest projects. The mixed-use development will stand 23 stories tall and include 177 rental units, 100,000 square feet of office space and 40,000 square feet of retail space, and work should be finished around the spring of 2019, just in time for the L train shutdown. Tavros and Charney bought the site in March 2016 for $80 million.

4. The Union Forever — $91.8 million

Union Bank loaned Hudson Companies $91.8 million for the company’s Parkline project at 626 Flatbush Avenue in Prospect-Lefferts Gardens. The loan refinanced a $72.7 million construction loan Hudson had received, and the deal was structured as a purchase of bonds issued through the 80/20 housing program from the New York State Housing Finance Agency.

5. Schrodinger’s Walk — $85.2 million

Arker Companies’ affordable project at 10 Schroders Walk in East New York received an $85.2 million loan from the New York State Housing Finance Agency and the City of New York to round out December’s top five outer borough loans. The project will be a seven-story, 200-unit residential building located in a newly created part of Brooklyn on Schroder’s Walk, a one-acre site established in 2017 as part of the Fountains development at 888 Fountain Avenue that will span 1.2 million square feet overall.

6. Happy Arbor Day — $72.6 million

The first and only appearance from Queens on the list was Arbor Realty SR’s $72.6 million loan to Prime Group Holdings for their $94 million purchase of a self-storage site at 31-07 20th Avenue in Astoria, the second of two large bets on the city’s self-storage market the company made at the end of 2017. Prime Group bought the site from a Prudential Financial fund and Madison Development, the developer of the 173,990-square-foot building. The firm previously sold self-storage sites to Prime Group at 1098 Rockaway Avenue in Canarsie and at 1735 Zerega Avenue in the Bronx.

7. Partners with Benefits — $68 million

Benefit Street Partners loaned Toby Moskovits’ Heritage Equity Partners $68 million for the Williamsburg Hotel at 96 Wythe Avenue. The loan also includes a gap mortgage of $14,000 and replaces mortgages of $9.3 million and $58.6 million from Hutton Ventures and G4 Capital Partners, respectively. Heritage bought the Williamsburg Hotel site for $4.85 million in 2012 and developed it, and the hotel now stands eight stories tall with 150 rooms.

8. This United American Land is Your Land — $65 million

Signature Bank gave United American Land a $65 million mortgage for its Downtown Brooklyn building at 503 Fulton Street, replacing a 2015 loan of $37 million from TD Bank. The new loan also includes a gap mortgage of $27.5 million. UAL’s mixed-use building stands seven stories tall and spans about 139,000 square feet with 121 residential units and retail tenants such as TJ Maxx and Old Navy.

9. The (Almost) $64 Million Question — $63.7 million

The Bronx showed up on the list for the first and last time at No. 9 with a $63.7 million loan from Premier Funding Holdco to Jamestown for its $115 million purchase of a large office and retail building in the South Bronx at 260 East 161st Street. The loan includes a gap mortgage of $5.7 million. The 10-story, 276,622-square-foot building is located right across from the borough’s courthouses and a few blocks away from Yankee Stadium, and its tenants include the Legal Aid Society, Starbucks, Montefiore Medical Center and Chipotle.

10. Moaning Myrtle — $63 million

December’s list closed out with a $63 million loan from TPG to Madison Realty Capital for its property at 504 Myrtle Avenue. The financing includes a gap mortgage of $17 million, and part of it replaces an $11.8 million mortgage that Emigrant Bank gave Madison last year. Madison plans to develop a rental project called the Posthouse on site, which will include 143 units, 29 of which will be affordable.

Largest outer boro loans recorded in December 2017
RankAddressLoan amountBorrowerLenderNeighborhood
1Empire Stores, 55 Water Street$217 millionMidtown Equities, Rockwood Capital and HK OrganizationM&T Bank, Brooklyn Bridge Park Development CorporationDumbo
2Industry City, 3915 1st Avenue and others$195.6 millionJamestown, Belvedere Capital, Cammeby’s International and Angelo, Gordon & Co.Bank of ChinaSunset Bank
3The Dime, 263 South 5th Street$150 millionTavros Development Partners and Charney Construction and DevelopmentSquare Mile Capital ManagementSouth Williamsburg
4The Parkline at 626 Flatbush Avenue$91.8 millionHudson CompaniesUnion BankProspect Lefferts Gardens
510 Schroders Walk$85.2 millionArker CompaniesNYS Housing Finance Agency, The City of New YorkEast New York
631-07 20th Avenue$72.6 millionPrime Group HoldingsArbor Realty SRAstoria
7Williamsburg Hotel at 96 Wythe Avenue$68 millionHeritage Equity PartnersBenefit Street PartnersWilliamsburg
8503 Fulton Street$65 million United American LandSignature BankDowntown Brooklyn
9260 East 161st Street$63.7 millionJamestownPremier Funding HoldcoSouth Bronx
10504 Myrtle Avenue$63 millionMadison Realty CapitalTPGClinton Hill
Source: The Real Deal analysis of NYC Dept. of Finance loans recorded in December 2017. Refinance deals with the same lender, mortgage spreader agreements or extensions were not included.