CapitalSource provides $29m Brooklyn construction loan

CapitalSource provided a $29 million loan that will be used for the development of 308 North 7th Street in Brooklyn’s Williamsburg neighborhood. The floating rate construction loan construction loan carries a three-year term with two one-year extension options, sources said.

Adam America Real Estate is building a 38-unit multifamily condominium property at the site. The developer purchased adjacent properties at the site in November of 2014 for $18.25 million with $8 million in financing from Bank of the Ozarks, city property records show.

Brooklyn, and particularly the Williamsburg neighborhood, has seen staggering development in recent years as pricing skyrocketed in Manhattan. Yet condominium units have comprised just 8 percent of Brooklyn’s total development pipeline, according to a statement from the broker on the deal, JLL Capital Markets.

Bounded by North 6th and North 7th Streets, and Meeker Avenue, the seven-story property will hold 38 “luxury” units and feature a fitness center, a courtyard, bike storage and rooftop common area with views of Manhattan and Brooklyn. Original permit plans showed that the developer would use air rights from an industrial property at the site to contribute to its 42,000 sq ft of residential space.  

Just this week at WeiserMazars LLP’s New York Commercial Real Estate Summit, panelists noted that it’s becoming more challenging for developers to find reasonably priced land deals in Manhattan, which first led to a stream of development into Brooklyn and Queens but is now extended further into upstate New York and parts of New Jersey.