Dealmaker: Madison Realty Capital Closes $103M

Madison Realty Capital, New York, closed a $72 million first mortgage loan collateralized by Highline Development Group’s nearly completed condominium development in Manhattan’s Chelsea neighborhood.

MRC Co-Founder and Managing Principal Josh Zegen said the firm delivered the financing within seven days.

Currently in the final stages of interior construction with completion expected mid-year, 550 West 29th Street will offer 19 residential units and 5,000 square feet of premium retail/gallery space with 75 feet of street frontage.

The property is located on 29th Street between 10th and 11th Avenues adjacent to the High Line near several prominent art galleries. The residences range from 1,900-square-foot three-bedroom units to 4,000-square-foot, four-bedroom, four-and-a-half-bathroom units. Some units will have private terraces up to 1,835 square feet with northern and western views of Manhattan.

MRC also closed a $31.4 million first mortgage loan secured by a mixed-use development located at 744 Bedford Avenue in Brooklyn’s Williamsburg neighborhood. The property was previously unencumbered, so all the new loan’s proceeds will go toward completing construction of a New York City Department of Buildings-approved 134,750-square-foot building.

Zegen said the project qualifies for the city’s 421a tax abatement program, which encourages development on underutilized land by reducing property taxes. It incorporates 88 residential rental units and 18,500 square feet of retail space. The sponsor, a local developer, has laid the building’s foundation and commenced vertical construction.

“We believe this project will be successful based on its excellent location, thoughtful design and vested 421a benefit,” Zegen said.

MRC funded $5.6 million at closing; the remaining funds will be drawn as construction progresses. The borrower anticipates topping out this summer and completing construction in spring 2019.

The property is in the southern part of Williamsburg in an area with significant residential demand, Zegen said. Williamsburg overall has experienced a wave of new construction and gentrification over the past 15 years.