Developer Secures $50 Million in Construction Loans for Park Slope Condo
JDS Development has secured $52 million in construction financing for a new apartment condo it is building in Park Slope, Brooklyn.
The firm, known for high-end residential projects in Manhattan such as Walker Tower, received a $41 million senior loan from G4 Capital Partners, a lender that has funded other JDS projects. Savanna, a landlord that owns a large portfolio of commercial buildings in the city, provided the developer with an $11 million mezzanine loan in the deal.
The loan will be used for an 11-story, roughly 50-unit apartment building at the corner of Baltic Street and Fourth Avenue. The building, which is under construction and will be finished in the summer of 2017, will also have ground-floor retail space.
Two years ago, JDS bought the site for about $6 million, using an acquisition loan that was provided by G4. G4 rolled that loan and subsequent increases it issued to JDS, which helped pay for preparations needed to ready the site for development, into the latest construction loan it provided.
Obtaining financing for apartment projects is no small feat for developers these days, as banks have become concerned about the large inventory of high-end apartment projects being constructed throughout the city, especially in Manhattan and Brooklyn.
G4 has financed other JDS projects, including a $5.5 million loan for a development site the developer purchased last year in Williamsburg at 71 North Seventh St. for more than $8 million.
Founded by developer Michael Stern, JDS has become one of the most prolific builders in the city. The company is preparing to build the tallest tower in Brooklyn—a residential spire nearly 1,100 feet tall. It is also planning a 1,400-foot-tall condo tower on Billionaire’s Row in Manhattan.
In recent years, G4 has been an active specialty lender in the city, providing several developers with acquisition and construction financing. The firm, for instance, provided the developer of the Williamsburg Hotel with $51 million of construction financing for that project, which is underway.
Specialty lending has grown as real estate purchases have become more competitive and speculative in the city. Developers need financing faster than typical lenders like banks are willing to provide to win out on acquisition deals. Specialty lenders, rather than banks, have also been more willing to take risks on developers’ visions for pricier residential projects.
By Daniel Geiger , Crain’s New York
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