Dealmaker: Knighthead Funding Provides $36M for Multifamily, Retail

Knighthead Funding LLC, Greenwich, Conn., provided $36.3 million for multifamily and retail assets in Chicago and New York.

In the Chicago Glendale Heights/Lombard submarket, Knighthead provided Noah Properties, Chicago, with a $14.3 million construction loan for Roselle Apartments. When completed in first-quarter 2020, Roselle Apartments will include 72 two-bedroom, two-bath rental townhomes in six three-story buildings on Irving Park Road.

The transit-oriented development is less than two blocks from the Roselle Metra station and 10 minutes by car from O’Hare International Airport.

“The submarket benefits from strong multifamily occupancy and limited new supply,” said Knighthead Senior Associate of Loan Originations Peter Illuzzi. He said Knighthead funded the 18-month non-recourse loan on an expedited schedule due to a time-sensitive closing following a recent rezoning.

Knighthead also provided Cayuga Capital Management, Brooklyn, N.Y., with $22 million in short-term debt to convert a vacant Brooklyn warehouse into a 46,000-square-foot retail facility. The renovated site at 1 Nassau Ave. in the Williamsburg neighborhood will house the first East Coast facility for Vital Climbing Gym.

Proceeds from Knighthead’s 24-month financing will complete building renovations and tenant improvements for the California-based fitness operator, which recently signed a long-term lease to occupy the entire building beginning in April 2020. Vital Climbing currently operates three gyms in southern California and one in Bellingham, Wash.

“The sponsors have strong experience redeveloping, managing and repositioning similar assets, including three in Williamsburg and Bushwick [Brooklyn],” Knighthead Principal Jonathan Daniel said. “The target customer for Vital Climbing Gym fits well with the demographic make-up of Williamsburg.”