Private credit pulls weight in NYC’s debt market 

As regional banks suffer from a muted mortgage market and humbled real estate portfolios, private creditors have been picking up the slack.

Two of the largest commercial real estate loans so far this year, plus a smattering of mid-sized deals, have come from private creditors, who also frequently make equity investments.

Elliott Management lent $180 million to build multifamily properties in Greenpoint, and Macquarie Group provided an inventory loan for a condo conversion on the Upper West Side. 

It was Barclays, however, that financed the purchase of a residential portfolio away from New York Community Bank, which has been under fire for losing $2.4 billion more than it had reported last quarter. 

The 10 largest real estate loans across New York City in January amounted to $1.09 billion, on par with last year’s January top-10 total of $1.07 billion. 

Here are the details:

Super Fund | $179M | Greenpoint

Elliott Investment Management lent Madison Realty Capital $179 million to build a multifamily project at 65 and 75 Dupont Street, Brooklyn.

Located on a Superfund site once belonging to a plastics factory, the eight-story project will yield 400,000 square feet with 279 apartments at 65 Dupont Street and 194 apartments at 75 Dupont Street, where construction topped out in December. 

Madison took ownership of the troubled Brooklyn project in 2021 after Bo Jin Zhu’s DuPont Street Developers filed for bankruptcy. 

Madison became the senior lender on the project in 2017, replacing Maxim Credit Group one year before the attempt to sell to All Year began, and credit-bid its way to ownership. Maxim returned to the project last summer to provide a $40 million bridge loan to Madison.

New year, new lender | $170M | Upper West Side

Macquarie Group lent $170 million to John Tashjian’s Centurion Property Investors for the unsold units at 212 West 72nd Street. The loan covers 58 units, out of 108 total, at the curved-glass corner building on Broadway. 

Centurion bought the property in 2019 and converted its 196 rental units to condos. With the conversion, the company hoped to sell units at roughly $2 million each, and was eyeing a $403 million sellout. Sales launched in 2021.

Centurion purchased the property for about $227 million from TIAA’s real estate investment arm. It initially secured about $204 million in financing for the deal from KKR Real Estate Finance. The refi added about $39 million to the outstanding debt of $131 million.

Apollo mission | $130M | FiDi

Retirement savings investor Athene Annuity and Life Company took over lending at 116 John Street with a $130 million loan to Silverstein Properties.

Silverstein Properties bought the 400-unit apartment building in the Financial District from Nathan Berman’s Metro Loft Management in 2021 for $248 million.

Athene, owned by private equity firm Apollo Global Management, took over lending from insurance giant AIG, which lent Silverstein $130 million as part of the purchase. That loan replaced debt held by Brookfield Property Partners.

Peace dividend | $118 million | Crown Heights

Canadian pension investor BCI will fund the construction of 237 residential units at EMP Capital and Y&T Development’s multifamily Brooklyn project at 1034-1042 Atlantic Avenue. The fund’s real estate investment manager is QuadReal Property Group. 

The residential project survived a scrape with City Council member Crystal Hudson in 2022 by offering more affordable units in the building. A more recent project under Hudson’s purview, at 962 Pacific Street, was not so lucky. 

NJ to NY | $105M | Boerum Hill

New Jersey-based Valley National Bank loaned $105 million to Avdoo Development to build a 104-unit condo project at 323 Bergen Street, Brooklyn. The 210,000-square-foot development neared topping out late last year, Yimby reported.

Avdoo spent $44 million to acquire the land, the Commercial Observer reported in 2022. The developer was recently active in Gowanus, too, and completed a condo project in Boerum Hill, with 100 apartments at 58 St. Marks Place, in 2020. 

Three’s company | $95M | Turtle Bay

Bank OZK loaned a joint venture of MAG Partners, Safanad and Eyal Ofer’s Global Holdings to build a 194-unit, mixed-use development at 300 East 50th Street. 

The full capital stack for the project amounts to $200 million, according to MaryAnne Gilmartin’s development firm. Some 30 percent of the units in the building will be set aside as affordable. The project was temporarily delayed by anti-harassment laws requiring owners to certify that no tenants were harassed to leave their dwellings before demolition can take place. 

Barclays buy | $84M | Upper Manhattan

Barclays lent $84 million to Empire Management for a residential portfolio of six at 515 Cathedral Parkway, 509 Cathedral Parkway, 517 West 113th Street, 603 West 140th Street, 664 West 163rd Street and 652 West 163rd Street.

Barclays took over the loan from New York Community Bank, which replaced its CEO and delayed the release of public financing statements amid finding “ineffective oversight” of the loan reviewal process. The bank said earlier its dividend would fall by 70 percent to boost capital. It has hiked loss reserves, expecting more distress in its sizable multifamily portfolio.

Shabby chic | $79M | Lower East Side

German insurer Zusatzversorgungskasse des Baugewerbes AG consolidated debt on a troubled condo project at 222 East Broadway with a $79 million loan to Optimum Asset Management.

Optimum has been planning the development since 2016. The developer initially wanted to build something larger than the 70 condos across two touching towers it unveiled, but trouble with a neighbor caused it to scale back and undergo years of delay.

The developer and partners Ascend Group and Round Square Development’s Rob Kaliner responded to a failed air-rights acquisition by instead constructing one tower and renovating a neighboring property.

Refi in Queens | $71M | Woodside

London-based private investor Cain International refinanced construction debt on a 364-unit multifamily building at 72-01 Queens Boulevard, Queens, with a $71 million loan to the Hakimian Organization. The developer paid $33 million for the development site in 2018. The project topped out last summer.

Settled dust at the Tillary | $59M | Downtown Brooklyn

Chicago-based Slate Real Estate Capital refinanced Brooklyn’s Tillary Hotel, at 84 Flatbush Avenue Extension, with $59 million. Ohana Real Estate bought the property for $94 million in 2022 during a hotly contested bankruptcy proceeding. The hotel had become a homeless shelter during Covid. The development, completed in 2015 by Isaac Hager and Lipa Rubin, includes 174 hotel rooms, 64 rental apartments and 6,800 square feet of retail.

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