NEW YORK CITY-Madison Realty Capital, an institutionally backed commercial real estate investment firm and asset manager, announced the closing of $13 million in financing for the third-party purchase of a defaulted note. The note, originated by Community Preservation Corp. and carrying an outstanding principal balance of approximately $17 million, is secured by a condominium development located at 143-159 Classon Ave. in the Clinton Hill section of Brooklyn.
MRC funded $9 million to the borrower at closing, and provided a commitment for an additional $4 million of construction financing, subject to satisfaction of various conditions. The loan will finance the borrower's purchase of the existing debt from CPC, as well as construction costs needed to obtain a certificate of occupancy for a portion of the project.
“Our track record in note purchase financing, combined with our fully integrated real estate platform, allows us to understand the nuances of a complicated real estate transaction such as this and close in a relatively quick timeframe,” says Josh Zegen, co-founder and managing member of MRC. “We were able to facilitate the right structure for this deal with a superior risk adjusted return.”
The property is comprised of two contiguous residential buildings located at 143 and 159 Classon Ave. The former is a five-story building containing approximately 37,492 sellable square feet across 17 residential units. The latter, also a five-story building, contains approximately 35,210 sellable square feet across 20 residential units. Common recreation spaces are located in the cellar. Tenants have use of individual storage lockers in the sub-cellar of 143 Classon Ave., while the sub-cellar of 159 Classon Ave. offers parking for 18 cars.
The property broke ground in 2007 but the difficult economic environment caused the original developers to file for bankruptcy. The project is in various stages of completion, with 143 Classon Ave. almost finished and 159 Classon Ave. requiring significant construction work before receiving its final certificate of occupancy.
Madison Realty Capital lately has made its presence known in several boroughs. Earlier this month the company announced the closing of a $29 million first mortgage loan collatalized by two industrial properties located off the Queens Midtown Expressway and a mixed-use building in Lower Manhattan.
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Rayna Katz
Rayna Katz is a seasoned business journalist whose extensive experience includes coverage of the lodging sector, travel and the culinary space. She was most recently content director for a business-to-business publisher, overseeing four publications. While at Meeting News, a travel trade publication, she received a Best Reporting award for a story on meeting cancellations in New Orleans during Hurricane Katrina.
