One of the most ambitious projects envisioned for the Bronx is in the making. To turn it into a reality, a new record in financing will likely need to be set for the borough. According to the Real Deal, The Chetrit Group and Somerset Partners are endeavoring to create 1,300 residential rental units throughout seven-buildings in Mott Haven, South Bronx. The project is slated to cost $600 million. The partners plan to put in between $100 million to $150 million in equity. As per Keith Rubenstein from Somerset, they are seeking a construction loan of up to $500 million for the megaproject.
The developers are actively pursuing domestic lenders in hopes to obtain a mezzanine loan, a first mortgage or preferred equity. Adi Chugh from Maverick Commercial Properties and Robert Verrone from Iron Hound Management Company are working together on the quest for financing. Regardless to whether or not the financing is obtained, the developers have set the date for next month to break ground on the site. The complex will consist of three new buildings at 2401 Third Avenue. Two of them will soar 25 stories high and the other will be 16 stories high. There will be four more buildings at 101 Lincoln Avenue. Three of those will rise 24 stories high and the other will be 22 stories. The Mott Haven construction will ensue in two phases, and is slated for completion in late 2019.
The fast growing borough of Bronx has yet to see a construction loan in excess of $200 million, much less $500 million. Last April, Taconic Investment Partners and Clarion Partners secured $110 million in financing for the Eastchester Heights complex which consists of 118 buildings. Also last year, the Morgan Group received $148.6 million in refinancing for 21 rental buildings. In 2016, the Bronx enjoyed a record $3.3 billion in real estate investment, with more than 14.2 million square feet of development, according to Ruben Diaz Jr, the Bronx Borough President.
The Chetrit Group, headed by Joseph Chetrit, is no newcomer to the field. They have successfully scooped up plenty of high profile properties, played the market with perfect timing and proved their ability to acquire loans. They received a $135 million loan from Bank of the Ozarks and Melody Finance for Dekalb Avenue, dubbed Brooklyn’s tallest tower, along with their partner JDS Development Group. In December, Chetrit Group also obtained a $194 million loan package from Acore Capital and SL Green Realty for a condo conversion at 49 Chambers Street in the Financial District.
By: Ilana Siyance