JERSEY CITY, NJ-The Gotham, a 22-story apartment tower here, has been refinanced with a $70 million Fannie Mae loan in a deal brokered by BlueGate Partners and secured by Beech St. Capital.
A payment-in-lieu-of-taxes agreement was involved, tied to the original financing, and not due to expire until 2020, making the transaction highly complex.
Development partners Panepinto Properties and Ironstate Development were looking to cash out their investment in 220-unit Gotham in order to invest in other projects, while taking advantage of still historically-low rates, according to Brian Sykes, the senior vice-president in Beech Street's Boston office who originated the transaction.
“The challenge was securing a loan that was large enough to compensate for the substantial prepayment penalty on its existing loan,” Sykes said.
Chris Zirrith, CFO at Ironstate said the Gotham refinance was the second recent deal in which the companies worked with Beech Street. “We were thoroughly confident that the complexity of the deal wouldn't slow them down and that they could deliver the terms we needed,” he said.
Beech Street secured approval for the $70 million loan, meeting the borrower's cash-out requirements, and scoured the capital markets for terms that lowered interest payments by 80 basis points. The fied-rate loan, which has a 10-year term and 30-year amortizing schedule, was closed within 45 days.
BlueGate Partners, the broker, is a boutique advisory and transactional firm based in Manhattan.
The 13-year-old Gotham was the first luxury apartment in Jersey City developed off the waterfront in 50 years at the time it was built. Its upper floors offer panoramic riverfront, Manhattan skyline and Statue of Liberty views.
The building is situated three blocks west of the Exchange Place PATH station and has six ground-floor commercial spaces, all occupied, plus a four-story parking garage.
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