JV Secures $184M to Fund Second Gowanus Multifamily

A joint venture of Canyon Partners Real Estate, Tavros and Charney Companies has secured $184M in funding for a 260-unit multifamily project in the Gowanus section of Brooklyn.

The 15-story apartment building, to be located at 251 Douglass Street in a qualified opportunity zone, will be funded with $64.4M in equity and a $120M senior construction loan provided by Barings.

The loan was arranged by a Newmark team led by Jordan Roeschlaub and Dustin Stolly, co-presidents of Debt & Structured Finance, and Chris Kramer, an executive managing director.

The project, which will include ground-floor retail, will designate 65 units as permanent affordable housing.

The apartment tower on Douglass Street is the second multifamily development in Gowanus announced this year by the joint venture. In January, Canyon, Tavros and Charney said they would develop a 224-unit apartment campus at 585 Union Street.

“As Gowanus becomes a central community for families and young professionals, there is a growing need for modern, affordable housing in the area,” said Nicholas Silvers, founding partner at Tavros, in a statement.

Canyon’s its investment in the Douglass Street project is its twelfth qualified opportunity zone investment, bringing its total QOZ project capitalization to $1.2B.

In June, partners Property Market Group (PGM) and private equity firm Carlyle secured a $335M construction loan for a 517-unit multifamily campus encompassing two mixed-use towers in Gowanus.

The construction financing was provided by Apollo Global Management and Related Companies as part of a $500M recapitalization that includes $165M in equity. JLL represented the developers.

The multifamily campus, located at 267 Bond Street and 498 Sackett Street, will include 52K SF of ground-floor retail space.

The project is one of several developments that have been initiated in an 82-block area surrounding the Gowanus Canal that was rezoned to in 2019 to facilitate the construction of more than 7.6M SF of new residential space as well as 1.5M SF of new commercial property.

Until the rezoning, the Gowanus Canal area was a decaying industrial zone filled with vacant lots. The canal itself—for decades a toxic waste dumping ground for coal tar from manufactured gas plants in the area and combined sewer overflow—was in the midst of a federally financed cleanup.

In 2010, the Gowanus Canal was designated a federal Superfund site by the US Environmental Protection Agency, which began a decade-long $500M cleanup that involved dredging an average of 10 feet of contaminated sediment from the bottom of the canal. A cap also was installed on the native sediment below the pollutants that were removed from the canal.

The Superfund project at the canal—said to be the largest ever undertaken by the EPA—was spearheaded by the Gowanus Canal Community Advisory Group, including the Gowanus Canal Conservancy.