When Brooklyn Boulders sued a Williamsburg landlord in May to get out of its lease, it was among the first in what would become a wave of retail lease disputes.
While the parties continue to hash things out in court, landlord Double U Realty, led by principals Jay and Michael Weitzman, has landed $41 million in bridge financing for the mixed-use building at 56 North 9th Street. The lender was JPMorgan Asset Management, according to a person familiar with the deal.
The six-story property was built in 2018, and includes 45 residential units and 35,000 square feet of commercial space. A three-story space at its base was set to house a boutique gym concept for Brooklyn Boulders before the pandemic hit. That lease was ranked as the borough’s third-largest in 2019.
Lantern Real Estate arranged the financing. “The tenant’s abrupt exit not only created credit issues around the property cash flow but also resulted in contractor liens being filed during the loan closing,” Lantern co-founder Tal Bar-Or said.
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The financing comes at a challenging time for retailers in general and gyms in particular.
In its May court filing, Brooklyn Boulders claimed that its “specialized business plan” for a densely packed boutique space had been “completely destroyed” by social distancing guidelines. New York City gyms were allowed to reopen in August, albeit at 33 percent capacity and with strict guidelines on air filtration and social distancing.
The financing has yet to hit public records, which show that G4 Capital Partners provided a $36.9 million debt package for the project in 2018.
In the ongoing court case, a telephone conference has been scheduled for Oct. 13 to discuss the rock-climbing gym’s plan to file a motion for summary judgment.