Yoel Goldman sews up long-term funds for Rheingold Brewery Project

JPMorgan, Mack team up on $235M senior loan at 123 Melrose
By Hiten Samtani | June 11, 2019 11:05AM

Mack Real Estate Group's Richard Mack and JPMorgan's Jamie Dimon with a rendering of 123 Melrose Street (Credit: Getty Images and ODA Architecture)

Mack Real Estate Group’s Richard Mack and JPMorgan’s Jamie Dimon with a rendering of 123 Melrose Street (Credit: Getty Images and ODA Architecture)

Yoel Goldman has done it.

After a lengthy quest to lock down long-term financing for the second phase of his Rheingold Brewery project, a saga that involved at least one aborted senior-loan deal and a pricey mezzanine loan, Goldman’s All Year Management has scored $235 million in a deal that will allow him to get the development over the line.

JPMorgan and Mack Real Estate Group are providing the $235 million senior-loan financing for the 468-unit rental at 123 Melrose Street, The Real Deal has learned. The new debt will likely ease the burden on Goldman: Mack had already issued All Year a $65 million mezzanine loan at an interest rate expected to be between 10 and 12 percent. That loan has now been restructured.

The financing also pays off a $165 million loan Madison Realty Capital had made on the project; the minimum interest rate on that loan was 10.5 percent, according to filings All Year made on the Tel Aviv Stock Exchange, where it has issued bonds. The interest rate on the new loan is between 5.5 and 6 percent, sources familiar with the transaction said.

“There was overwhelming interest in this project and competition to finance it,” said Abe Wurzberger, director of finance and acquisitions at All Year. “We are very happy to have chosen JPMorgan.”

Madison Realty Capital’s Josh Zegen said that company has “successfully exited its $315 million total commitment to Yoel Goldman’s Phase 1 and Phase 2 of the Rheingold buildings from land acquisition to construction.”

Galaxy Capital’s Henry Bodek brokered the loan deal. He declined to comment. Representatives for Mack didn’t respond to requests for comment.

Goldman’s attempts to lock down long-term debt for the project were complicated by his troubles earlier this year on the Israeli bond market, sources said. Mack was initially planning to issue a $230 million senior loan in partnership with a bank, but opted to issue a smaller mezzanine loan in February. Other sources familiar with the transaction disputed that the events on the Israeli bond market were a complicating factor; they noted that with the building now closer to completion, the market viewed the project as far less risky and hence Goldman was able to secure more favorable interest rates by waiting a few months.

The 1 million-square-foot ODA New York-designed project is set to be one of Brooklyn’s largest new rental developments, with over 900 units, more than 100,000 square feet of retail space and an 18,000-square-foot park. Goldman bought the parcels for the project in deals totaling $140.7 million. The first phase, a 443-unit rental building at 54 Noll Street named “Denizen Bshwck,” is nearly fully leased.

In February, Goldman agreed to sell a Gowanus parcel to Rabsky Group for about $95 million.