NEW YORK CITY-Now that the condo bust of '08 is long gone, low vacancy rates and high demand are driving lenders back to Brooklyn. As part of that growing trend,Â Berkadia Commercial Mortgage LLCÂ Â has closed on $49.95 million in financing for a new multifamily project at 205 N. Ninth St. in Williamsburg, GlobeSt.com has confirmed.
The firmâ€™s SVPÂ Stewart CampbellÂ and VPÂ Thomas Tolandoriginally structured interim construction financing for the 113-unit, 112,000-square-foot property through Berkadiaâ€™s bridge lending program in November 2011. â€œWe allowed them money to complete the job and stabilize,â€ Toland tells GlobeSt.com, explaining that the funds were then used to refinance the construction loan and to provide funds to finish and lease the project.
After the development was completed, Berkadia provided the borrower,Â North Driggs Holdings LLC, with a permanent 10-yearÂ Fannie MaeÂ loan at a 3.62% interest rate, which closed on June 14. The building reached 100% occupancy in March 2012, and includes amenities such as a gym, lounge, screening room and rooftop deck. It is also in close proximity to the Bedford Avenue L subway stop.
At the same time, Campbell tells GlobeSt.com that many hurdles existed when refinancing the loan, which included development issues, a lack of a permanent certificate of occupancy at closing, preliminary certificate of eligibility for 421-A tax exemption, and issues relating to cross-easements for ingress/egress and parking.Â Â Â
â€œThe biggest challenges there were it is an ongoing development site,â€ he says. â€œThe challenges were separating our collateral between the three sites, so making sure we could legally separate our collateral from the other sites, and with that, the complications that come with separating the tax abatement. Those are the biggest challenges. Certainly from a construction standpoint, all that was top notch construction.â€
But overall, Campbell says the deal is a sign that the stalled site phenomenon in Williamsburg has come to an end. â€œThe inventory of stalled condo jobs is pretty much through,â€ he says. â€œThe deals that were developed as condos and went rental are pretty much done. There are certainly some other jobs out there that stalled at the footing stage, and I think this area has showed renewed interest because the rental numbers are working on those deals for new construction financing. I still think it is a big challenge to get new construction financing today, but it gets better day by day. Six months ago, I would have told you that you had to be a top 50 developer, but now you can maybe be a top 100 developer.â€