HAP Investments’ first project in Tribeca is moving forward with more than $107 million in financing.
The $94 million construction loan for the 41-unit condominium was provided by G4 Capital Partners, the same private lender that provided HAP with a $32 million loan to acquire the site back in February 2018. The three-year loan was paired with a $13.5 million mezzanine loan from New York City developer and lender Quinlan Development Group.
HAP’s co-founder and CEO Eran Polack expects demolition of the existing five-story building at 65 Franklin Street to begin within weeks.
HAP’s new condo project is breaking ground amid a soft high-end new development market, but Polack is confident “the market will be there” when he takes units out to buyers. He estimated the project will launch sales in 18 to 24 months with the building being completed in three years.
“I’m a big believer in the New York condo market,” he said. “I’m sure in a year or two the market will be very strong.”
He also noted that “we don’t see many new projects starting” in the last couple years. Residential construction in Manhattan has dropped off, and a September analysis by the Marketing Group, shows that the number of new condo units expected to be delivered in Manhattan drops sharply in 2022 with an average price per unit of $2.7 million.
Polack declined to disclose pricing at 65 Franklin and plans have yet to be filed with the Attorney General’s office. However, a source estimated prices would be set around $2,500 per square foot, with most units ranging from 1,000 to 2,500 square feet and the largest spanning 3,500 square feet.
Plans for demolition and the new 19-story building were filed last July with the Department of Buildings. The plans show five duplex units and two full-floor units in addition to two floors of retail at the base of the building. Amenities, according to the plans, will include a children’s playroom, a swimming pool, bike parking and a rooftop terrace. CetraRuddy is the architect.
Both lenders noted the unit layout was an important factor behind capitalizing the project.
One of G4’s founding partners, Robyn Sorid, said the lender was a “huge champion of this deal” because of its “unique layouts and price points that provide optionality for various types of buyers.”
The $94 million loan is the fourth G4 has issued to HAP and the largest loan originated to date, according to the lender’s website. (Sorid first mentioned the forthcoming deal in an interview with The Real Deal last fall.)
Quinlan partner Tyler Wilkins also noted that by not having “large and elaborate” units, the building was “much more attainable.” He also said that Tribeca “will always be desirable.”
This is Quinlan’s first project with HAP. They were brought to the deal by HFF’s Chris Peck, Peter Rotchford, Rob Hinckley and Steven Rutman.
Though Polack rejects the notion that he’s waiting on the market to change — “I think the market will stabilize,” he said — he also noted that he’s not in a rush to launch sales.