As regional banks struggle with a sluggish mortgage market and deteriorating real estate portfolios, private lenders have stepped up to fill the gap.
Two of the largest commercial real estate loans so far this year, and a handful of mid-sized transactions, have come from private lenders that often also make equity investments.
Elliott Management has lent $180 million to build an apartment complex in Greenpoint, while Macquarie Group has provided inventory financing for an apartment renovation on the Upper West Side.
But it was Barclays that financed the purchase of the housing portfolio from New York Community Bank, which is under fire for losing $2.4 billion more than it reported in the previous quarter.
The 10 largest real estate loans across New York City in January totaled $1.09 billion, matching the $1.07 billion combined for the top 10 in January last year.
Where:
Superfund | $179 million | Greenpoint
Elliott Investment Management has lent $179 million to Madison Realty Capital to build a multifamily project at 65 and 75 Dupont Street in Brooklyn.
The eight-story project, being built on a Superfund site that was once the site of a plastics factory, will have a total floor area of 400,000 square feet and will include 279 apartments at 65 Dupont Street and 194 apartments at 75 Dupont Street. Construction was completed in December of last year.
Madison took over ownership of the troubled Brooklyn project in 2021 after Bo Jin Chiu's Dupont Street Developers filed for bankruptcy.
Madison replaced Maxim Credit Group as lead lender on the project in 2017, taking over a year before the sale to All Year and attempts to acquire ownership through a credit bid began. Maxim rejoined the project last summer, providing Madison with a $40 million bridge loan.
New Year, New Lender | $170 Million | Upper West Side
Macquarie Group has loaned John Tashjian's Centurion Property Investors $170 million for the unsold units at 212 West 72nd St. The loan applies to 58 of the 108 total units in the curved-glass corner building on Broadway.
Centurion bought the property in 2019 and is renovating the 196 rental units into condominiums. The company hopes to sell the units for about $2 million each, raising the total price at $403 million. Sales are set to begin in 2021.
Centurion purchased the property from TIAA's real estate investment arm for about $227 million. The company had originally secured about $204 million in financing from KKR Real Estate Finance for the deal. The refinancing added about $39 million to its $131 million in outstanding debt.
Apollo Mission | $130 million | FiDi
Retirement savings and investment firm Ascena Annuity & Life Co. has taken over lending operations at 116 John Street through a $130 million loan to Silverstein Properties.
Silverstein Properties bought the 400-apartment property in the Financial District from Nathan Berman's Metro Loft Management in 2021 for $248 million.
Athens, owned by private equity firm Apollo Global Management, assumed financing from insurance giant AIG and lent Silverstein $130 million as part of the acquisition. The loan replaces debt held by Brookfield Property Partners.
Peace Dividend | $118 million | Crown Heights
Canadian pension investment company BCI will finance the construction of 237 residential units at EMP Capital and Y&T Development's multifamily project at 1034-1042 Atlantic Ave. in Brooklyn. The fund's real estate investment manager is QuadReal Property Group.
The housing project survived a clash with City Council Member Crystal Hudson in 2022 by offering more affordable units in the building. A more recent project under Hudson's watch, 962 Pacific St., hasn't been so lucky.
New Jersey to New York | $105 million | Boerum Hill
New Jersey-based Valley National Bank has loaned $105 million to Avdoo Development to build a 104-unit apartment complex at 323 Bergen St. in Brooklyn. The 210,000-square-foot development was nearing completion late last year, ImBee reported.
Avdu spent $44 million to acquire the land, Commercial Observer reported in 2022. The developer has also been active in Gowanus recently, completing a 100-unit apartment project at 58 St. Marks Place in Boerum Hill in 2020.
Three's Company | $95 million | Turtle Bay
OZK Bank provided financing to a joint venture between MAG Partners, Safanad and Eyal Ofer's Global Holdings to build the 194-unit mixed-use development at 300 East 50th Street.
According to Mary Ann Gilmartin's development company, the total capitalization of the project is $200 million. About 30 percent of the units in the building will be set aside as affordable housing. The project has been temporarily held up by anti-harassment laws that require owners to prove that residents are not being harassed to leave their homes before demolition.
Acquired by Barclays | $84 million | Upper Manhattan
Barclays lent $84 million to Empire Management for a portfolio of six homes, including 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 loans from New York Community Bank, which replaced its CEO and delayed the release of financial statements after it found it had “no effective oversight” of its loan-underwriting process. The bank had previously said it would cut its dividend by 70% to shore up its capital. It has increased its loss reserves as it expects further deterioration in its large multifamily portfolio.
Shabby Chic | $79 Million | Lower East Side
German insurer Zusatzversorgungskasse des Baugewerbes AG has consolidated debt from the troubled apartment project at 222 East Broadway with a $79 million loan to Optimum Asset Management.
Optimum has been working on the development since 2016. It originally planned to build 70 apartments in two adjacent towers, but problems with neighbors led to scale back and several years of delays.
Developers and partners Rob Culliner of Ascend Group and Round Square Development responded to the air rights bid failure by instead building a single tower and renovating an adjacent property.
Queens Refinance | $71 Million | Woodside
London-based private investor Kane International refinanced construction debt for the 364-unit apartment complex at 72-01 Queens Boulevard in Queens with a $71 million loan to the Hakimian Organization. The developer purchased the development site for $33 million in 2018. The project was completed last summer.
Tillary's dust has settled | $59 million | Downtown Brooklyn
Chicago-based Slate Real Estate Capital has refinanced the Tillary Hotel at 84 Flatbush Avenue Extension in Brooklyn for $59 million. Ohana Real Estate purchased the property for $94 million in 2022 amid a hotly contested bankruptcy proceeding. The hotel had been a homeless shelter during the COVID-19 pandemic. The development, completed in 2015 by Isaac Hager and Ripa Rubin, includes 174 hotel rooms, 64 rental apartments and 6,800 square feet of retail.
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