News
MULTIFAMILY MONDAY: 4 PROJECTS BELOW 14TH STREET
July 16, 2012
| It used to be that hipsters refused to stray north of 14th Street, trying to avoid the suits. Now the quintessential businessman, the real estate developer, is crossing the border. Because—sing it with us—things'll be great when you're Downtown. Don't wait a minute more Downtown. Everything's waiting for you. |
| 1) ALPHABET CITY |
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| Dermot's Andrew Levison tells us Arabella 101 on Avenue D betweeen 7th and 8th streets started leasing on Thursday. The Lower Eastside Girls Club will own almost three floors of the 12-story building, and Dermot and Lowe Enterprises will own the rest. The three parties bought the lot from the City in 2010, and the building broke ground in October of that year; move-ins start Aug. 15. Its 38 market-rate apartments have already had a few tours, and 7,000 applications came in for the 39 low- and middle-income units. Andrew says the market-rate interest indicates that Dermot's price points are right on. At $2,400 for a studio and $2,950 for a one bedroom, Alphabet City's movin' on up. (How are Mark and Roger gonna pay last year's rent?) |
| 2) LOWER EAST SIDE |
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| This morning, Prudential Douglas Elliman's Michael Bolla told us the newly opened Madison Jackson at 371 Madison St, just south of the Williamsburg Bridge, is meant for young pros and first-time buyers, really anyone who wants to live in Manhattan, walk to work, and own his or her place. In the spirit of the neighborhood, he says, the 110 units are way affordable for condos, starting at $340k for a one-bedroom. |
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| Michael says the Sung family, one of the most prominent Chinese-American business families in the country, bought the Charles B.J. Snyder-designed P.S. 112, built in 1908, at auction 35 years ago, and it's sat empty since. Even now, Michael says, the development may be five years too early, as the City has issued an RFP (60% commercial and 40% residential) for its lots north and south of Delancey. Once those are developed, values on The Madison Jackson units will rise. |
| 3) WILLIAMSBURG |
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| Even this Brooklyn neighborhood isn't a hallowed hipster haven anymore. Berkadia Commercial Mortgage's Tom Toland tells us he and colleague Stewart Campbell helped a Brooklyn developer replace high interest rate construction financing from a group of private individuals for The Driggs at 205 N Ninth St. NYC 421(a) tax exemption changes going into effect in '08 had motivated developers to get out of the ground even when typical financing wasn't available, and now, Tom says, those properties are coming to market. So Berkadia provided $28M in bridge construction financing for the property in November. Construction finished in January, and the 113 units were fully leased by March. Then a month ago, Berkadia provided $50M in permanent financing from Fannie Mae. Tom says the $60/SF actual rents blew out Berkadia's $45/SF underwriting and that while it's not unusual for stabilization to take 18 months, it's happening in Williamsburg in two and a half. |
| 4) STATEN ISLAND WATERFRONT |
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| This one is so far Downtown you have to take a boat to get there. Madison Realty Capital co-founder Josh Zegen tells us he wasn't looking for a Staten Island property, but when you're buying debt, opportunities surface all over the place. The original developer of the 40-unit 224 Richmond Terrace on the Staten Island waterfront submarket of St. George was overbudget and overleveraged. The developer intended The View as condos for Financial District workers but defaulted in '09. Massey Knakal listed the loan sale for Bank of New York Mellon in April, and Madison Realty closed on the debt purchase in May and bought the property at auction earlier this month. |
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| Josh says The View cost $20M to build, it had $13M left on the principal balance, and Madison bought the debt for $8.4M. It's got some minor work to complete and then will start leasing in a few months, and Madison Realty isn't the only owner starting something new there. Triangle Equities is building 400 units and Ironstate Development is putting up 800. Not to mention the City's RFP for the world's largest Ferris wheel there and a $220M redo of the courthouse complex. Now Madison Realty is under contract on a second St. George property, this one retail. And the company also bought another incomplete condo building, 385 Union Ave in Williamsburg (above). He says those 47 units are leased now, but there's opportunity to raise rents. |
