Dov Hertz has landed a big construction loan for his multi-story warehouse development in Sunset Park.
JPMorgan provided the developer’s DH Property Holdings with nearly $442 million in financing for its planned 1.3 million-square-foot Brooklyn distribution hub, sources familiar with the transaction told The Real Deal.
The financing will allow DH Property and its partners — Bridge Development Partners and Banner Oak Capital Partners — to start building the four-story warehouse next year. Construction is expected to take between 36 and 40 months.
Representatives for DH Property and JPMorgan declined to comment. TradedNY first reported the loan, which was arranged by Eastdil Secured.
The massive project will cover 18 acres along Third Avenue between 19th and 21st streets. It is among a handful of multi-story warehouse developments in the city looking to capitalize on the fervid demand from e-commerce and logistics companies for distribution points within the city.
Hertz and his partners purchased the site at 75-81 20th Street for $255 million in 2019, with $200 million in financing from Apollo Commercial Real Estate.
Hertz noted at the time that the location is within a one-hour drive of 13 million consumers.
“It sits at the nexus of the inbound and outbound traffic needs of any third-party logistics, parcel carrier, or retailer looking to meet same- or next-day delivery in New York City,” he said.
The e-commerce industry’s push for fast delivery has only increased since then. Space for last-mile distribution centers in the city is hard to come by, but developers can maximize it by building up. The downside is the higher cost, in part because truck ramps to the upper floors are required.