Bank of the Ozarks provided a $25m loan for Slate Property Group’s planned 19-story, mixed-use rental project with nearly 30,000 sq ft of flagship retail at 1 Flatbush Avenue in Downtown Brooklyn, Real Estate Capital has learned.
The one-year loan with extension options will float at an undisclosed rate over Libor.
Slate and Meadows Partners paid $59m for the site from Carlyle Group and Capstone Equities in April, with Meadows contributing $40m in joint venture equity. Hailed as a record-setting deal for Brooklyn, the reported price worked out to almost $500 per sq ft for the 120,000 sq ft site.
Adam Hakim and Sam Zabala, managing directors with Eastern Consolidated’s Capital Advisory Division, arranged the $65m in total financing (the $25m loan plus the $40m from Meadows), supporting the acquisition and pre-development phases.
“Very few times in your career do you get a phone call and the stars just seem to align,” Hakim said. “Meadows was looking for a big retail deal and we’ve done a lot of business with Bank of the Ozarks. Both were great to work with, allowing us to close the debt and equity within a month.”
The 172,000 sq ft project will be part of the New York State Housing Finance Agency’s 80/20 program, requiring that 20% of residential units be deemed “affordable” based on median income guidelines for the area; in this case 32 out of 156 rental units.
Located at the intersection of Flatbush Avenue, Fulton and Nevins Streets, the development also will offer close to 30,000 sq ft of retail space on the basement, ground, and second floors, and a fitness facility for tenants on the third floor.
“This high-profile, flagship retail location is what drove the [acquisition] price on this,” Hakim said. “The project will transform an underdeveloped corner, offering retailers an unprecedented level of exposure from the heavy foot traffic on Flatbush Avenue.”
The development sits atop the Nevins Street station, where the Metropolitan Transit Authority’s (MTA) 2, 3, 4, and 5 train lines converge, also a short walk from the transportation hubs at Atlantic Terminal and DeKalb Avenue. Together these stations handle an average of 71,000 subway riders each day, while 50,000 cars per day travel on Flatbush Avenue.
Eastern Consolidated last worked with Bank of the Ozarks in May, when it placed a $115m loan to finance the construction of an 11-story luxury residential condominium at 527 West 27th Street in the High Line district of Manhattan’s West Chelsea neighborhood.
Elsewhere in the country, in October, Bank of the Ozarks provided a $56.4m construction loan for the development of NorthEdge, a Class A office property in the North Lake Union submarket of Seattle, Washington.
And in June the bank and Cornerstone Real Estate Advisers provided $160m in combined financing for the development of a dual-branded W + Element hotel in Center City Philadelphia, Pennsylvania: a $100m senior loan and a $60m mezzanine loan, respectively.
Hakim and Zabala joined Eastern’s Capital Advisory Division, launched by managing director Jonathan Aghravi last year, in May, bringing with them a book of business from Prospect Capital Group, a boutique capital markets shop. The duo has overseen a combined $8bn in transactions.