Kushner Companies and Extell Development Company have closed on two phases of financing totaling $129m for the Pier Village waterfront condominium development in Long Branch, New Jersey.
Capital One originated a $97m long-term fixed-rate loan from Fannie Mae to take out the acquisition financing Capital One provided in November; and the new developers assumed a seven-year, $32m Freddie Mac loan PNC Bank provided in 2013 to the previous owner, Ironstate Development.
The joint venture acquired Pier Village for $180m in the last quarter of 2014, with plans to complete a stalled third phase of the project.
The development consists of 492 residences and over 100,000 square feet of retail. Opened in 2005, Pier Village has been a source of local controversy due to the city’s use of eminent domain [the government takeover of private property for public use] at the site. The city has rallied behind the new developers in hopes that they will speed along the final phase, which includes additional residential condominiums, retail space and a boutique hotel.
Ironstate had received a city-authorized $25m bond and a subsequent 30-year tax exemption among other incentives, part of which the new developers inherited.
“Kushner has to come in… their theory is they want to come in with fewer units, bigger size, sell for more money — and that will finance the bond,” Long Branch Mayor Adam Schneider told local publication Atlanticville last month.
Laurent Morali, a Kushner Companies managing director, said in a statement: “Working with Capital One, Fannie Mae, PNC and Freddie Mac is a testament to the quality of the asset itself. But we also feel it speaks to the strength of the partnership we’ve assembled to purchase it. We’re appreciative of the trust and confidence these major lending institutions have placed with us and look forward to seeing Pier Village continue to thrive as a gem along the Long Branch coast.”