Joseph Chetrit has finally closed the purchase of a Two Bridges development site, with the help of an acquisition loan.
The developer purchased the site at 260 South Street on the Lower East Side from CIM Group and L+M Development Partners for $78 million, the Commercial Observer reported. Madison Realty Capital provided $70 million in acquisition financing for the transaction.
The Real Deal reported in November Chetrit was in contract to buy the site. At the time, it was believed Chetrit would be paying around $100 million. People familiar with the deal told TRD Chetrit had been in talks to acquire the site with Michael Stern’s JDS Partners, but those negotiations ultimately collapsed.
The financing was arranged by Henry Bodek of Galaxy Capital Solutions, according to the Observer. Cushman & Wakefield brokered the sale with a team led by Adam Spies, Josh King and Dan O’Brien.
In September, the previous developers filed plans for a two-tower, 73-story project at the site, set to feature 1,313 residential units across towers connected at the base by a 14,500-square-foot community facility. The development was planned to span 1.3 million square feet.
Details of Chetrit’s plans for the site are still emerging, but don’t appear to stray too far from what CIM and L+M had planned. According to the Observer, Chetrit is eyeing a 1,300-unit complex with 64- and 70-story towers.
CIM and L+M acquired the development site, along with a pair of apartment buildings, in 2013 for about $280 million. In 2020, they sold off the apartment buildings to Related Companies for $435 million.
Development in the Lower East Side neighborhood has been at the center of a long legal battle. In May, the state’s highest court declined to hear an appeal on whether a trio of developments, including projects by JDS and the Starrett Corporation, needed City Council approval. The courts sided with Mayor Bill de Blasio’s administration and decided they did not.
Community groups and some City Council members argued the developers needed political approval on changes to a plan put in place for the site five decades ago. Development was put on hold in June 2019 when a state judge determined the three projects had to go through the city’s land use review process.
The May ruling cleared the way for development on the site.
[CO] — Holden Walter-Warner