NEW YORK CITY-Steelworks Lofts, a stalled 110,000-square-foot mixed-use condominium development at 76 North 4th Street in Brooklyn’s trendy Williamsburg neighborhood, has received a jump-start. The project secured a $28.4 million acquisition and construction loan on behalf of a partnership between Cayuga Capital Management and Jacob Toll, according to Meridian Capital Group LLC, who arranged the 36-month loan.
The partnership purchased the note from the previous construction lender—which included private lenders as well as troubled bank Anglo Irish Bank Corp.—in an all-cash transaction, and then acquired the deed on Steelworks Lofts by executing a deed-in-lieu-of-foreclosure, according to Real Capital Analytics.
The site—formerly the home of the Lewis Steel Products factory in the 1930s—was rezoned from industrial to allow mixed-use commercial usage. In June 2007, the property was acquired by developer Fifth Square Partners for $26.1 million, who planned to build 88 condominium units on the land. But after the housing bubble burst, the developer was unable to pre-sell the units to obtain construction financing, RCA records show.
Now, the new owners plan to convert the former steel factory into an 83-unit rental apartment building, including 20,000 square feet of retail space on the ground floor. Building amenities will include a health club, roof patio with gardens, barbecue pits and bocce ball courts.
The project’s rebirth comes at a time when rental rates in Brooklyn are nearing Manhattan pricing. According to the latest monthly data from MNS Real Impact Real Estate, new rental product in Williamsburg is achieving rental rates in the mid $50s per square foot, with studios averaging at $2,938, one-bedrooms at $2,960 and two-bedrooms clocking in at $3,776, GlobeSt.com previously reported.
Aaron Appel, a managing director at Meridian, says the building’s location, the borrowers’ renovation expertise and market knowledge helped to procure “highly competitive” construction financing with limited guarantees in a challenging construction financing environment.
“This is a prime example of how Meridian can leverage its significant market share and strong reputation to tailor a unique value-add financing solution on behalf of a sophisticated institutional client,” he says, in a statement.
Meridian vice president Michael Diaz also worked on the negotiation of the transaction.
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