Lenders favor resi projects in big month for outer-borough loans
Carlyle, KKR, Domain and more defied interest rates with major financing deals in Brooklyn
Kings County reigned in July as lenders pumped billions into outer-borough real estate projects.
Brooklyn captured seven of the month’s 10 largest commercial loans, while Queens had the other three. A couple big projects in rezoned Gowanus received construction loans, while Carlyle leveraged its Brooklyn and Queens buying spree into the month’s biggest outer-borough financing deal.
Below are more details on each of them:
Clever Carlyle | Brooklyn and Queens | $500 million
The Carlyle Group got up to $500 million from Invesco secured by 39 small multifamily properties, which the private equity giant recently bought in Brooklyn and Queens. The company sought a specific tax-class of building called 2A/2B, which limits increases on real estate taxes to no more than 8 percent a year. Because the properties have no more than 10 units and tend to be mostly free-market, they avoid many of the restrictions placed on owners by the state’s 2019 rent-stabilization law.
Leser is more | Brooklyn | $202 million
Abe Leser’s Leser Group landed $201.9 million from UMB Bank to build a 325,000-square-foot office and retail building at 2440 Fulton Street, alternatively addressed at 1495 Herkimer Street, in Ocean Hill, Brooklyn. Construction loans for the project total $166 million, and $35 million went toward refinancing the senior loan. New York City’s Department of Social Services will anchor tenancy in the building, taking up more than 200,000 square feet. Retail will make up 25,000-square-feet. Leser bought the development site in 2015 for $33 million. Metropolitan Commercial Bank was the prior lender.
Big in Jamaica | Queens | $196 million
BRP Companies secured $196 million from AIG Investments to build a 614-unit residential building at 90-02 168th Street in Jamaica, Queens. Scheduled for completion in 2025, the 716,000-square-foot project has $378 million in total financing and will rise near the Jamaica Long Island Rail Road station. A shopping corridor on Jamaica Avenue, where Jeff Sutton’s Wharton Properties owns retail, is nearby. BRP bought the development site in 2018 for $20.5 million.
Gowanus a go-go | Brooklyn | $176 million
Domain Companies received $176 million from Bank OZK to build a 360-unit residential complex with two towers at 420 Carroll Street in the recently rezoned area of Gowanus. Other partners in the project include Vorea Group, Silverstein Properties and affiliates of Cantor Fitzgerald. A quarter of the buildings’ units will be set aside as affordable. Domain bought the development site from Property Markets Group in 2018 for $47.5 million.
Your guilders’ worth | Queens | $170 million
Kevin Chisholm’s 60 Guilders used $170 million from Apollo Global Management to buy 33-00 Northern Boulevard, a 550,000 square-foot office building in Long Island City, which Vornado sold for $173 million. Government agencies including the Metropolitan Transportation Authority and the city’s Human Resources Administration anchor the building’s nearly-full tenancy.
Special KKR | Brooklyn | $132 million
Private equity investor KKR received $131.5 million from State Street Bank and Trust Company to buy a 365-unit rental tower in Downtown Brooklyn, in partnership with Dalan Management, for $190 million. The 35-story building at 80 DeKalb Avenue is 80 percent market-rate. A one-bed, one-bath unit currently lists for $4,430 per month, after concessions.
London calling | Brooklyn | $126 million
London-based Quadrum Global nailed down $126 million from Madison Realty Capital and Axos Bank to build a 171-unit condo building at 29 Huron Street, also known as 161 West Street, in Greenpoint. The 13-story project across 178,000 square feet was designed by Morris Adjmi Architects. Quadrum bought the site, consisting of a vacant warehouse, in 2014 for $45.5 million as part of a 1031 exchange, using proceeds from the sale of B Ocean Resort in Fort Lauderdale, Florida. Serhant will market the condos, sales of which are expected to begin this summer.
Corner the market | Queens | $122 million
TF Cornerstone received refinance loans totalling $121.9 million from PNC Bank for 4540 Center Boulevard, a 345-unit residential building constructed in 2012 and overlooking the East River in Hunters Point, Queens. The funds retire loans from Queens West Development Corporation, a subsidiary of New York State’s Economic Development Corporation, which is charged with remediating industrial waterfront property in Long Island City. A studio apartment currently lists for $3,080, and one-bedrooms for $3,625 and $4,075, according to StreetEasy.
Gowanus a go-go II | Brooklyn | $107 million
Tavros Holdings and Charney Companies received $107 million from Pacific Western Bank to build a 214-unit residential building at 577 Union Street in Gowanus. After buying air rights from a nearby single-family lot, the developers filed plans to build a 229,000-square-foot building that stands nine stories. Tavros and Charney bought the site in 2019 for $32.7 million. A quarter of units in the building will be set aside as affordable per the city’s mandatory inclusionary housing policy.
O Canada | Brooklyn | $98 million
Brookfield Properties received $98 million from Royal Bank of Canada, including $35 million in new debt, to refinance its leasehold position at 100 Myrtle Avenue. The 600,000-square foot office building forms part of Downtown Brooklyn’s multi-million-square-foot pedestrian business district Brooklyn Commons, formerly known as MetroTech Center. Brookfield refinanced One MetroTech Center, a 950,000-square-foot office building at 351 Jay Street, earlier this year with $150 million from Well Fargo.