NEW YORK CITY—Madison Realty Capital has provided first and second mortgage financing of about $124 million to Brookhill Properties for the acquisition and future renovation of a 15-building, 175,000 square foot portfolio of residential and mixed-use properties in the East Village.
Earlier this month, Brookhill closed the $97 million buy from the Tabak family, longtime owners of the assets, according to the Commercial Observer. The financing is being used to fund the acquisition and future renovations on the multifamily and mixed-use properties in the portfolio. Among the buildings are 231 E. 5th St., 514 E. 12th St. and a number of buildings along East 10th street.
“This portfolio of properties in such prime locations in the East Village would be nearly impossible to replicate in today's market, particularly at an excellent basis like what was achieved here. In general you see single building sales or small portfolios, not big bulk sales like this one, so it's truly a one-of-a-kind opportunity,” says Josh Zegen, co-founder and managing principal of MRC. “We were able to provide a one-source capital solution by participating in various tranches of the capital stack, which enabled the borrower to complete the acquisition, and to proceed with his plan to renovate and reposition the portfolio. We believe the borrower has a great opportunity here, considering the portfolio has been undermanaged and offers a significant market-rate component.”
The portfolio has a mix of studio and one-bedroom units with some retail components and offers potential for significant value appreciation through the renovation and repositioning plan. The neighborhood is increasingly popular with young professionals and students due to its retail, restaurant and nightlife offerings along with its proximity to NYU and the city's employment centers.
MRC worked closely with the borrower to provide a flexible financing solution to facilitate the acquisition, a complex off-market deal with long-term family owners. Going forward, the borrower plans to update common areas of the buildings, renovate residential units to maximize square footage and lease up vacancies.
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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.
