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Category ArchiveConstruction

Thorobird Wins $65M in Public Bonds for Bronx Supportive Housing Plan

A residential project in the Bronx, designed to house middle-class and low-income tenants, as well as people with addiction and mental-health problems, has received $65 million in public bonds to fund construction, according to an announcement from its developer, Thorobird Companies.

Known as The Grand, the project, which will comprise three buildings at 220 East 178th Street, 225 East 179th Street and 2189-2195 Morris Avenue in the Mount Hope neighborhood, will offer 138 apartments targeted to residents across the income spectrum. Although a suite of features including a furnished roof deck, solar electricity and a modish design concept recall market-rate developments elsewhere in the city, dozens of The Grand’s apartments will be dedicated to supportive housing, a program designed to reintegrate mentally ill or formerly homeless or imprisoned people into the mainstream housing stock.

To that end, the complex will sport round-the-clock onsite counseling and support from social workers and other therapists. That service will be administered by ACMH, a New York City-based non-profit that runs programs for transitional residents at several housing programs in the city.

The 40-year financing for the project—which consists of contributions from the New York State Housing Finance Agency and the New York City Department of Housing Preservation and Development, will help Thorobird create a more humane community for needy residents than currently exists in the city, according to Thomas Campbell, Thorobird’s founder.

In typical affordable housing projects, “housing is something you do to someone, not for someone,” Campbell said. “We believe in homes, and we want to humanize the experience for our residents, [allowing them] to live in a place built with them in mind.”

“We’re so far behind as a society in providing affordable housing,” he added.

The project was jump-started in part by a $250,000 capital injection from the office of the Bronx borough president, Ruben Diaz Jr. The grant, known as Resolution A funding after the city provision that allows for the discretionary outlay, was crucial for getting larger agencies on board, according to the developer.

“When you get started with a project, you need someone to step in first,” Campbell said.

Diaz described Campbell’s project as a model for integrated housing solutions in the city.

“This is construction with common sense and compassion,” Diaz said, praising the conceit to house some of the city’s neediest residents alongside working-class neighbors. “It’s important for us to have income diversity.”

Still, Diaz said, the funding process was flawed. The HFA pushed Thorobird around in the project’s planning stages, the borough president averred, requiring the developer to meet exacting specifications before providing the financing bond.

Freeman Klopott, a deputy commissioner in the state housing administration, resisted that narrative, noting that New York State received an application for funding in February 2017 and approved the bond in September, without unusual delay. An official at the New York City Department of Housing Preservation and Development, who requested anonymity, agreed that no delay had occurred.

Source: commercial

Madison Realty Capital Lends $54M as Condo Project Gets Fresh Start

A distressed condominium project will get a fresh start at 208 Delancey Street, thanks to an infusion of $53.5 million in debt from Madison Realty Capital, Commercial Observer can exclusively report.

Construction on the Lower East Side building had stalled under the auspices of a previous ownership group, Delancey Bridge Tower, prompting the lot’s sale to New Empire Real Estate Development. Now, the new owner will partially demolish the steel frame that has already been erected at the site, backtracking in order to slightly alter the design of the 69-unit apartment building, according to officials at MRC.

The lender partially backed New Empire’s purchase of the project in December, contributing $15 million in debt to the nearly $30 million acquisition, to which New Empire also made a significant equity contribution, according to Josh Zegen, a managing principal at MRC. With rights to the site in the bag, New Empire added another $38.5 million to its tab with MRC this week, aiming to begin work at the site within the next six months.

“I’m a strong believer in [the Lower East Side] in general because of the price point and the emerging quality of the housing, retail and office space,” Zegen said. “Everything about that neighborhood has the wind to its back: good transit and good amenities.”

New Empire’s acquisition of the site concluded a messy slog for Delancey Bridge Tower, a consortium of 53 investors that struggled to top out the condo project they’d planned there since buying the lot for $8.5 million in 2012. In September 2016, the investor group sued a different prospective buyer, American Chengxing Investment, for failing to close on a contract to buy the inchoate apartment building,

When completed, New Empire’s 85,000-square-foot condo structure, located between Clinton and Attorney Streets, will stand at the western terminus of the Williamsburg bridge in a neighborhood reaching the climax of a decade of revitalization. Ranks of low-income public-housing projects line the district’s eastern edge along the East River, but new cultural destinations, like the Metrograph movie theater, and a slew of modish restaurants have lent its streets a higher-rent air.

Representatives from New Empire Real Estate Development did not respond to a request for comment.

Source: commercial

Mack Real Estate Lends $90M on Florida Luxury Condos

Mack Real Estate Credit Strategies has provided a $90 million mortgage to Fisher Island Investments for Palazzo Del Sol and Palazzo Della Luna—two adjacent luxury residential condominium properties on Miami’s Fisher Island, Commercial Observer can first report.

The 18-month bridge loan will finance the sellout of the 15 remaining units at the 43-unit, 10-story Palazzo Del Sol and complete construction of the 50-unit Palazzo Della Luna. Fisher Island Investments has $400 million in equity in the project.

With density restrictions and high barriers to entry, the Kobi Karp-designed palazzos are two of only three properties to be developed on Fisher Island in the past decade. Their amenities include a butler-staffed bar and lounge, valet parking, a fitness center, a private massage room, hair salons, movie theater, a business center and a children’s playroom.

“At 20 percent loan to value we’re very protected. There’s very high barrier to entry and only room to build 120 more homes on the island,” Peter Sotoloff, a managing partner and the chief investment officer of Mack Real Estate, told CO. “It’s a very high quality development with a great local sponsor.”

Created in 1906 and mostly developed between 1970 and 2000, Fisher Island is three miles off the shore of Miami and accessible only by ferry or boat. Over the years, the 192-acre island’s residents have included Oprah Winfrey and Mel Brooks.

The project isn’t Mack’s first foray into the South Florida market. In October last year, the lender provided $315 million in financing for the construction and recapitalization of Penn-Florida CompaniesVia Mizner, a 2-million-square-foot mixed use project in Boca Raton, Fla., as first reported by CO.

“With the new tax code, Florida may become more attractive, given the issues with SALT deductions,” Sotoloff said of the pull to the Sunshine State. “We’ve been very selective and have only been doing high-end projects. Here we have a very committed sponsor with $400 million of subordinate equity—one who controls the development rights—and a very low basis in some of the finest real estate in the area.”

Mack’s deal volume for 2017 was approximately $4 billion, Sotoloff said, including over $2 billion in New York.  The lender is targeting $5 billion for 2018 in New York and other gateway markets nationwide.

Officials at Fisher Island Investments couldn’t immediately be reached for comment.

Source: commercial

Construction Starts in the Bronx Projected to Top $2B—Again

The Bronx is still burning.

Led by strong housing development, the value of construction starts in the Bronx is expected to be more than $2 billion for the third consecutive year, according to a just-released New York Building Congress Bronx study of Dodge Data & Analytics data covering the first nine months of 2017.

The Building Congress forecasts that about $2.3 billion worth in projects will have commenced construction this year in the Boogie Down, roughly the same amount as in 2016, and slightly outperforming 2015’s $2.2 billion.

Projects that started this year in the borough by September were collectively worth $1.7 billion, according to the analysis. (New York City overall saw around $31.2 billion of construction project starts through the first three quarters of 2017.)

The Bronx has seen increasing interest from developers over the last 10 years in response to the demand for more affordable housing citywide as well as the availability and affordability of the land in the borough.

“The Bronx is experiencing positive momentum and benefitting from continued strong investment from both the public and private sectors,” Building Congress President and Chief Executive Officer Carlo Scissura said in a prepared statement. “With the value of annual construction starts more than doubling since the beginning of this decade, it’s obvious that the development community now views the Bronx in a whole new light.  And I would be surprised if that percentage doesn’t continue to rise in the coming years.”

As of September, the top costliest developments in the Bronx this year are a $232 million project to replace Unionport Bridge and a $133 million 12-story, 305-unit apartment building at 443 East 162nd Street in Melrose, which is being developed by New York City’s Department of Housing Preservation and Development, the Women’s Housing and Economic Development Corp. and BFC Partners

Housing account for the largest asset class—53 percent—for which new projects began construction through the first three quarters of 2017 in the Bronx, according to the report. That was followed by public works at 20 percent, institutions (schools and health care facilities etc.) at 15 percent and commercial properties with 11 percent.

“The Bronx possesses the most opportunities for new residential development, and the ability to produce new housing for residents at all income levels,” Scissura said. “As the de Blasio administration further ramps up its affordable housing program and as private developers increasingly look to the north, the future looks bright for the Bronx.”

Excluding the final quarter, the Bronx saw 3,190 residential units begin construction in 2017. The report indicates that the total is on track to outperform last year’s 3,918 units and 2015’s 4,240 units, which was the most in the last decade.

“The Bronx has land, which the other boroughs don’t,” Louis Coletti, the president and CEO of the contractor association umbrella Building Trades Employers’ Association told Commercial Observer. “And the land is obviously less costly than in Manhattan or Brooklyn.”

Regarding the future of development projects in the Bronx, Coletti added: “The only thing that could impede the growth of the Bronx is the natural economics of real estate—if interest rates start to get too high and people decide they aren’t going to borrow money or if [the economy] starts to slow down. Then you will see things slow down in the Bronx.”

Source: commercial

Trinity Unwraps $190M Construction Loan for Resi Condo at 77 Greenwich

Trinity Place Holdings‘ Christmas stocking came stuffed with a $189.5 million construction loan to finance its residential condominium project in Lower Manhattan, the company announced last Friday.

The loan, which according to regulatory documents was provided by the Massachusetts Mutual Life Insurance Company, carries a four-year term with the option for a one-year extension.

Plans call for the 40-story, 90-unit tower, at 77 Greenwich Street between Rector and Edgar Streets, to include 7,500 square feet of ground-floor retail space, as well as a public elementary school on its first eight floors, according to a Trinity press release. The New York City School Construction Authority has agreed to purchase an interest in the condo building, and will handle interior construction on the school when structural work is done.

The building’s sleek, glass-curtain-wall design, by architecture firm FXFOWLE, will preserve the adjacent landmarked Robert and Anne Dickey House building at 67 Greenwich Street, a structure that will be integrated into the new school.

Built in 1810, the 200-year-old federal-style townhouse illustrates Lower Manhattan’s checkered history. At the time of its construction, the Dickey House stood in what was Manhattan’s most fashionable residential neighborhood, according to the New York City Landmarks Preservation Commission. Later in the 19th century, saloons and bordellos sprung up in the area, and a special police squad raided the residence, which it called a “house of ill fame,” in 1871.

Mark Fisher, Shawn Rosenthal and Alexander Furnary of CBRE represented Trinity in arranging the financing. Newmark Knight Frank represented both the developer and the School Construction Authority for the transaction of the school system’s condo interest.

Construction at the site will also create a new handicapped-accessible entrance to the Rector Street station on the R and W subway lines. Completion is slated for 2020.

Representatives from Trinity, CBRE and NKF did not immediately respond to requests for comment.

Source: commercial

Thorofare Capital Lends Up Realty $19M to Acquire Connecticut Resi Building

Thorofare Capital provided Brooklyn-based Up Realty with $18.75 million in permanent bridge financing for the acquisition and renovation of the New Cambridge Apartments at 1175 Farmington Avenue in Bristol, Conn., Commercial Observer has learned.

New York-based MLK Realty Capital arranged the financing on behalf of the borrower. MLK Managing Principal Sol Kinraich, with Vice President of Capital Markets Ryan Goldstein and analyst Stephen Lanza worked to secure the financing.

“The purpose of the proceeds was to acquire the property and provide construction financing for the extensive rehabilitation of the interior and exterior of the building,” Kinraich told Commercial Observer. “This was an opportunity for the [borrower], who has extensive experience rehabbing these opportunities, to come in and work their magic.”

The four-story, roughly 165,000-square-foot apartment building was built in 1969 and is comprised of 208 units, with monthly rents currently ranging from $675 for studios to $1,100 for two-bedroom apartments, according to rent.com.

“In 2017, bridge financing morphed into an important area of focus for MLK Real Estate Capital and a majority concentration of our representative assignments,” Kinraich wrote in a MLK Real Estate Capital year-in-review letter. “We found opportunities in transactions nationally, where our clients secured a property with significant value-add upside via comprehensive repositioning by changing the historical use of the property or by replacing tenants.”

Officials at Thorofare Capital and at Up Realty could not immediately be reached for comment.

Source: commercial

Bank of the Ozarks Lends $40M on SMA Equities’ Lower East Side Development

SMA Equities has scored a $39.5 million construction loan from Bank of the Ozarks for its 88-unit apartment building at 255 East Houston Street in the Lower East Side, Commercial Observer has learned.

Cooper-Horowitz Principal Richard Horowitz arranged the financing on behalf of the borrower, while Richard Smith and Sean Marino led the Bank of the Ozarks team.

The deal closed yesterday, sources told CO.

The 14-story property will be located between Suffolk and Norfolk Streets and include 6,268 square feet of community facility space. Construction is expected to be completed within 24 months, sources said. 

Samy Mahfar’s SMA Equities purchased the development site—which previously housed two daycare centers—in June 2015 from Darius Meraj’s Eagle Cal Sc for $16.5 million.

Earlier this year, SMA and Halpern Real Estate Ventures sold a 78-unit apartment building located just a few blocks away at 331 East Houston Street to Arkar for $61.5 million. SMA and Halpern purchased four parcels of land at the site for $12.4 million in 2012 and spent $40 million developing the property. Sovereign Bank provided a $26.1 million construction loan for the project, which was also negotiated by Cooper-Horowitz.

Most recently, the brokerage arranged a $105 million CMBS loan from Natixis to refinance 111 West Jackson Boulevard—a 567,531-square foot office building in Chicago’s Central Loop, as first reported by CO.

As one of New York City’s most active lenders, Bank of the Ozarks weighed in at ninth place in terms of 2017 commercial loan origination volume, according to a recent Credifi report.

And it’s not the first time that SMA Equities and the lender have transacted. Earlier this month, Square Mile Capital Management and Bank of the Ozarks provided a $118 million loan to SMA Equities and The Moinian Group for Renaissance Tower—a 1.7-million-square-foot office building in Downtown Dallas.

Officials at SMA Equities did not immediately respond to a request for comment. A spokeswoman for Bank of the Ozarks declined to comment, as did officials at Cooper-Horowitz.


Source: commercial

The Construction Industry Should Brace Itself for a Rollercoaster 2018: Experts

Coming off a few booming years, New York City’s real estate industry—including the construction sector—has been suffering a bit of a setback this year.

The New York Building Congress forecasts at year end, $45.3 billion will have been spent on construction in 2017, the second-highest-ever total dollar amount committed to construction in the city’s history, according to the organization.

But it would mark a 13 percent decline from last year’s record $52.2 billion. At the same time, the number of jobs in the industry increased to 149,800 in 2017 from 146,200 in 2016. And the organization expects it to rise to 151,200 jobs next year.

Construction permits, which indicate the level of future work in the city, meanwhile are up slightly this year, although the pace is slowing. The New York City Department of Buildings issued 109,724 permits in fiscal year 2017, ending in July, a 0.4 percent increase from 109,277 in 2016, according to the city’s annual Mayor’s Management Report released in September.

What does all of this mean for the construction business in 2018?

Commercial Observer spoke with five experts about what to watch for. Overall, they forecast a decline in housing construction, but an increase in work in the public sector and the office market. The jury is out on construction costs. And then there is the elephant in the room: tax reform, which has been passed by the Senate but not the House of Representatives. Republicans cheer it as a win for jobs (and big Wall Street businesses are chomping at the bit as it would cut the corporate tax rate by nearly a half). Democrats are against it, claiming it serves wealthy individuals and corporations. As for New York City construction experts, they are split on the impact to their segment of the industry.


Over the past few years, there has been a surge in housing development, which many experts say has led to an oversupply. And in turn, construction of new homes slowed down this year by 41.2 percent and that is expected to continue for the foreseeable future. There were 37,700 new housing units added in 2016, just 26,700 this year, and the Building Congress expects 24,000 new housing units in 2018.

In terms of dollars and cents, $11 billion will be spent on residential construction this year, the Building Congress forecasts, a 31.3 percent drop from $16 billion last year. In 2018, the figure will rise to $11.6 billion.

“I think on the residential end—apartment complexes and condominiums—I think that it’s is a little overheated,” said Richard Lambeck, the chair of the construction management program at New York University’s Schack Institute of Real Estate. “There will be a slow down. The products that have been produced have surpassed the absorption rate. The amount of apartments that are going to be purchased is going to be slowed and it will have an impact on the industry.”

In addition to the oversupply problem, there are a lot of people crying “Not in my backyard,” a.k.a. NIMBY. Community organizations are rallying against large skyscrapers such as SJP Properties’ 200 Amsterdam Avenue on the Upper West Side, Gamma Real Estate’s planned 67-story building at East 58th Street between First Avenue and Sutton Place, and Extell Development Company’s 69-story tower at 50 West 66th Street.

The fear is that these projects could be forced to scale back or canceled altogether due to community opposition, which will lead to less work for construction companies and subcontractors.

“I worry about community to reaction to projects,” Louis Coletti, the president and chief executive officer of contractor association umbrella Building Trades Employers’ Association. “We are going to go back into the 1990s where NIMBYism just takes over and stops the city. You see this opposition to as-of-right projects, that’s crazy. You see the general direction of the city becoming progressive. You just wonder if it is the natural course of things as people become more politically active.”

Public works

Government spending for public infrastructure projects climbed this year for projects of note around the five boroughs, such as the redevelopment of LaGuardia Airport and the expansion of the Jacob K. Javits Convention Center and the new Kosciuszko Bridge.

Spending on similar projects is expected to reach about $16.9 billion in 2017, according to the Building Congress report—a 16 percent increase from 2016’s $14.6 billion. And the organization expects a further increase to $18.8 billion next year.

“Our infrastructure and transportation systems are the key,” Coletti said. “They are the real foundation to continued growth in the city. Those systems have lacked appropriate level of investment for many, many years. That’s the reason why the governor has to move billions of dollars for the [John F. Kennedy International Airport] and LaGuardia [Airport] [redevelopment projects].”

He added: “There is going to be a real focus on how to finance and really build our infrastructure to allow New York City to have continued growth.”

On the horizon, major infrastructure projects such as the redevelopment of JFK, the next phase of the Second Avenue subway and the Gateway Tunnel project—which would build another tunnel to New Jersey—lay in wait.

And some are questioning the viability of the next phase of Second Avenue subway project in the short term, as the calls to repair and fix the existing subways grow louder, meaning dollars would go to maintenance. While that could be great for commuters, maintenance produces less construction work than new projects.

“I don’t know if the [Metropolitan Transportation Authority] has sufficient funds to start that early,” Lambeck said. “At least from the MTA psperspective, they have been getting a lot of pressure, primarily in maintenance.”


All across the city there has been an abundance of construction on office projects in 2017. Just along the Far West Side alone there is Related Companies and Oxford Property Group’s Hudson Yards, Brookfield Property Partner’s Manhattan West and Moinian Group’s 3 Hudson Boulevard.  

In Brooklyn, Two Trees Management Company is building an 380,000-square-foot office tower at 292 Kent Avenue in Williamsburg; Rubenstein Partners and Heritage Equity Partners is working on the 500,000-square-foot 25 Kent Avenue in Williamsburg; Tishman Speyer and HNA Group is converting the upper floors of the Macy’s at 422 Fulton Street into 620,000 square feet of office space in Downtown Brooklyn; JEMB Realty and Forest City New York are building a 500,000-square-foot building at 1 Willoughby Square; and Thor Equities is working on Red Hoek Point in Red Hook, a nearly 800,000-square-foot office development. And in Queens, Tishman Speyer is building a 1.2-million-square-foot two-building office and retail project called The Jacx in Long Island City.

Construction work on all of these projects, as well as others, will continue into next year, keeping contractors busy.

“You have a lot happening with Midtown West products. You have a lot of activity in Lower Manhattan and upgrades to office buildings [across Manhattan],” said Carlo Scissura, the president and CEO of the Building Congress. “Office is a strong part of the market. And you are seeing [large office developments] happen in Brooklyn and in Queens.”  

Looking forward, the demand for office space in Manhattan is high (as CO recently reported), and there is a need to renovate a crumbling older stock of buildings. Redevelopments of towers and expansions are an area that could see growth next year. Midtown East—thanks to its new rezoning—will allow for larger projects and developers could look to redevelopment projects in the area, which would create more work for construction companies.

“Hudson Yards has proven that there is a tremendous need for new space and much of the city’s current product needs to be replaced,” said Kenneth Colao, the founder and CEO of CNY Group. “If you had another large sector of town that was wide open for development, I think it would be in play. The [Midtown East] rezoning I think will support more redevelopment.”

Construction costs

In May, Turner & Townsend released its annual construction market survey that pegged New York City as the world’s most expensive city for construction. The average cost of a building was at $354 per square foot, surpassing Zurich, Switzerland which came in at $328 per square foot.

Rising costs has become a problem in the industry due to a variety of factors, including the cost of labor. Construction companies have blamed union’s high hourly wages and an abundance of regulations.

On the latter point, unions have been making compromises in contract negotiations and lowering hourly wages as more developers demand general contractors take bids from nonunion companies in order to increase profit margins. Some construction leaders expect this trend to continue as the competition between organized labor and other subcontractors heats up further.

“I think the unions have to recognize that in order to be viable they need to work with their development clients and figure out ways to reduce costs,” said Richard Wood, the CEO of Plaza Construction.

Another reason for inflated construction costs is high insurance rates. New York is the only state with a law that allows a worker injured on a construction site to sue everyone—construction companies and individual superiors. This increased liability raises insurance premiums.

But regulations for the industry have increased towards the end of the year, as the City Council tried to improve safety on construction sites. The council passed a number of bills this year targeting construction safety, including one polarizing one: Intro-1447-C. The legislation will require workers to have at least 40 hours of safety training. Opponents to the bill claimed that it will force contractors to fund courses for their workers, increasing the bottom line. And the council also passed yesterday Intro-1399, which gives most industry employees, including construction workers, the right to “flextime” or two days off from their regular schedules.  

One construction watchdog said losing workers could disrupt work flow on projects.

“This isn’t a store or a restaurant—this is a construction site,” Coletti said. “We have schedules and budgets we have to make.”

Tax reform

As of publication, Congress’ tax reform bill had not been signed into law. But it looks extremely likely that it will as Republicans in the Senate passed a final version of the bill early today and their counterparts in the House of Representatives will re-vote on the legislation today after approving it yesterday with some errors.

The legislation will cut the corporate tax rate to 21 percent next year from 35 percent, which could mean a boon for companies. With extra money on their balance sheets, companies could reinvest in their offices. And real estate developers may use those funds to upgrade facilities in their assets. This will lead to more construction projects.

“I think indications are that it will be good for the construction industry,” Colao said. “If in fact the tax reform results in corporate tax reductions, corporations may start sprucing up facilities, then there would be an uptick in activity. Corporations—and entities that are tenants in office buildings—if they are looking at an improved bottom line at the same revenue—they might look to increase their capital expenditures.”   

However, as a part of the regulation, individuals will be limited in deducting state and local income taxes, sales taxes and property taxes to $10,000. Homeowners will be able to deduct mortgage interest on debt up to $750,000, down from $1 million. These segments of the bill don’t bode well for real estate interests in New York City, which has an average home sales price at $987,000 as of the third quarter, according to the Real Estate Board of New York. If people can’t reduce their taxes it will add to Gotham’s living expenses and could mean less people wanting to relocate to the city—lowering demand for more housing and impacting construction.  

“New York and especially the New York City area is one of the highest areas for state and local taxes,” Wood said. “I think there is going to be a tendency for people to want to move to states that don’t have high state taxes, and with that, many corporations may think in order to get a good labor pool they’ll want to move their offices to those low-tax states.”

He added: “I personally think that people are going to have to stay focused on solutions to that problem, because it could have long-term adverse effects on the real estate industry and the construction industry in New York.”

Source: commercial

Circle F Capital Seals $46M Construction Loan for LIC Condo Project

Circle F Capital, a family-held investment firm, has scored a $46.2 million construction loan to fund its development of a retail and condominium project in Long Island City, Queens, Commercial Observer can exclusively report.

Brookfield Real Estate Financial Partners will provide the financing for the site, at 22-43 Jackson Avenue, a few blocks from the East River waterfront near the Queens entrance to the Queens-Midtown Tunnel.

“We were delighted to assist the sponsor with this condominium development,” Eastern Consolidated’s Adam Hakim said in a statement. The building “will allow individuals the opportunity to buy an apartment in Long Island City, where nearly 80 percent of the new residential construction since 2006 has been for rental units.”

Hakim along with Eastern’s James Murad and Andrew Iadeluca brokered the financing on behalf of Circle F.

Property records show that Circle F acquired the development site in May for $23 million, with the help of bridge financing from iCross Fund, a real estate crowdfunding platform that draws investors from the U.S. and China. That initial financing has already been paid off, according to Lily Guo, the CEO of iCross.

Plans filed with the New York City Department of Buildings call for an 11-story building with 70 apartments and 13,000 square feet of retail space on the lower floors. To make way for the new project, Circle F has razed the prior structure on the lot, a vacant single-story commercial building constructed in 1964.

According to CoStar, the Museum of Modern Art leased 1,000 square feet in that building starting in 2011 adjacent to its PS1 contemporary art center at 22-25 Jackson Avenue, but a MoMA representative reached by phone could not provide information about the museum’s former use of the space.

High-end construction in Long Island City—formerly a sleepy warehouse district—has occasionally stirred controversy.

Conflict between artists and residential development in the neighborhood reached a flash point in 2014, when developers Jerry and David Wolkoff knocked down a warehouse building known as 5Pointz that had become a celebrated public canvas for accomplished graffiti artists. The developers’ conversion of the site into rental units prompted a lawsuit from the artists whose work was destroyed.

In November, a civil jury recommended that a judge find Jerry Wolkoff culpable of breaking a federal law by destroying the graffiti.

New York YIMBY reported in June that construction of the new condos at 22-43 Jackson Avenue is slated to finish in 2020.

Brookfield and Circle F did not immediately respond to requests for comment.


Source: commercial

ACORE Provides $132M Construction Loan for Cali Student Housing Property

ACORE Capital has closed a $131.7 first mortgage for the ground-up construction of The Graduate—a 19-story student housing building in San Jose, Calif., Commercial Observer can first report.

The loan, which has a 60-month term and closed on Dec. 8, was made to AMCAL Swenson, a joint venture of San Jose-based development firm Swenson and Los Angeles-based residential developer AMCAL Equities. The financing was arranged by Alison Company.

The Class-A, L-shaped property at 90 East San Carlos Street will sit on a 1.45-acre site located one block from the main entrance to San Jose State University. In addition to housing 1,039 students across 260 furnished apartments in its top 17 floors, the building will include 14,750 square feet of retail space, a four-level parking garage, an amenity deck and a pool.

The Graduate is located between the San Jose State University campus and San Jose’s SoFA District—the principal arts and entertainment area, stretching along South First Street between San Carlos and Reed Streets.

“The Graduate will serve as a significant bridge between campus and the SoFA District as well as the surrounding urban amenities of downtown,” Case Swenson, the president of Swenson, said in an announcement at the time of the project’s groundbreaking in October. Its construction is expected to be completed in 2020.

It’s been a busy year for ACORE Capital with the nonbank lender closing deals from coast to coast. In September, it closed a $63 million loan to Dr. Kiran Patel for the acquisition and renovation of Cheyenne Mountain Resort in Colorado Springs, Colo., as well as a $73.4 million financing for the redevelopment of 163 Varick Street in New York City. A month earlier, it provided a $121 million loan—which included a senior loan and a mezzanine portion—to developer Sterling Bay for its purchase of a vacant building in Chicago’s West Loop area.

AMCAL and ACORE officials weren’t available for comment by press time.

Source: commercial