Dealmaker: Knighthead Funding Closes Three Bridge Loans Totaling $30M

Knighthead Funding, Greenwich, Conn., provided three bridge loans totaling $30 million for three New York assets.

The largest financing is a $15 million first mortgage secured by three industrial buildings in Brooklyn’s East Williamsburg neighborhood. The asset included an existing “as of right” to build a residential development totaling 103,500 square feet.

Knighthead also provided an $8.5 million first mortgage secured by a 5.8-acre site in Irvington, N.Y. approved for a 27-unit townhome development.

“The borrower in this project spent over a year to receive all the approvals for this project,” said Knighthead Funding Principal Jonathan Daniel. “We structured the loan so they could acquire the remaining piece of the site needed to complete the approved subdivision.”

Daniel noted the property is in a bedroom community on the Hudson River within commuting distance to New York City. “Irvington is one of the most sought after towns for young families moving out of Brooklyn and Manhattan,” he said.

The third debt financing, a $6.5 million construction loan, will allow the sponsor to redevelop a one-story commercial building in New York’s West Side Hell’s Kitchen neighborhood. The four-story, 12,660-square-foot mixed-use building contains office space over retail. Upon completion, the property will contain 10,000 square feet of new office space for technology companies or other creative tenants. The property on 11th Avenue–10 blocks north of Hudson Yards–is surrounded by newly constructed multifamily high-rise developments.

“The borrower needed a lender to facilitate the construction of 3.5 stories on top of an existing retail structure,” Daniel said. He noted because banks continuing to struggle with regulatory constraints on construction loans, non-bank lender such as Knighthead Funding can finance projects such as these.