Starwood Capital Group has financed the $162 million acquisition of a 10-building industrial warehouse next to the Brooklyn Navy Yard at 9-47 Hall Street with a loan of the same amount.
The four-year loan includes $80 million up front and an additional $82 million of future funding for a sweeping renovation of the century-old property — aimed at luring creative tenants away from the borough’s pricier alternatives.
Based on the total costs that sponsors Westbrook Partners and RXR Realty will incur on the acquisition and renovations, likely to reach about $300 million, the loan-to-cost on the deal was assessed in the 50-55 percent range, sources said.
They noted that the appeal of the 660,000 sq ft property lies in its interconnected buildings which, even after renovations, will retain their old warehouse charm and still offer tenants a low-cost alternative to similar space in neighborhoods like Brooklyn Heights, DUMBO and Williamsburg. The buildings allow for a variety of leasing configurations, from small spaces up to 30,000 sq ft floor plates, with the open layouts, high ceilings and large windows that the latest generation of tech tenants look for.
“It’s never going to be the Bank of America tower in Midtown [Manhattan], but it has that feeling of an old school, cool creative space that will appeal to TAMI (technology, advertising, media, and information) tenants,” a source said.
The configuration of the buildings will also allow the sponsors to create a large open common space that draws the buildings together, culminating in a “campus-type space.” The properties also include about 50,000 sq ft of storage/basement space and 50,000 sq ft of additional commercial space designated for retail.