Largest NYC Real Estate Loans Led by Brooklyn Tower Debt Buy

The city’s 10 biggest real estate loans issued in December — $842 million in the outer boroughs and $765 million in Manhattan — were much smaller than in the same period of 2022, when the top 10 totaled $1.1 billion in the outer boroughs and $1.7 billion in Manhattan.

Blame financing costs: Since December 2022, the federal government’s interest rate benchmark has risen more than 1.2 percentage points, continuing an ascent that began in March of that year.

Not only is it more costly to borrow money, but banks that lend to office or rent-stabilized properties and have encountered balance sheet problems have had to cut back on lending.

TRD’s count of the month’s biggest commercial real estate loans excludes refinancing of debt by the same lender and loans made by municipal housing authorities. Here are the details of the city’s biggest real estate loans in the final month of 2023.

All in | $430M | Downtown Brooklyn

Silverstein Capital Partners bought the senior debt on JDS Development’s Brooklyn Tower, the borough’s first supertall and the city’s tallest outside Manhattan. As the original mezzanine lender on the project, Silverstein was in a position to reduce the borrower’s debt service payments by consolidating the project’s loans. Silverstein took over nearly $430 million in senior loans — construction and acquisition debt — for the 1,066-foot tower at 9 Dekalb Avenue in Downtown Brooklyn. Silverstein originated the project’s $240 million mezzanine loan in 2019.

The deal replaced Otera Capital as the senior lender. The tower has 150 condo apartments, 400 rental units and 100,000 square feet of commercial and retail space. Last year, JDS tried to sell the rental portion of the building.

The condo’s pricing, like its height, resembles Manhattan. A one-bedroom, one-bathroom unit listed at $2,240 per square foot is in contract, according to StreetEasy; a penthouse is priced at $2,600 per square foot. On the rental floors, one-bed, one-bath apartments are listed for between $5,310 and $6,185 per month.

Farewell, my sun | $220M | Midtown

Mexico’s Banco Inbursa lent Gary Barnett’s Extell Development $220 million to build a 534-key hotel in the Diamond Distric. Barnett scooped up the site, 32 West 48th Street, in 2018 for $40 million.

Despite court rulings in favor of Extell, the firm is still trying to remove window air-conditioners protruding from Jack Elo’s adjacent building at 29 West 47th Street. The developer claims Elo has purposely delayed the 33-story hotel because Elo may have to brick up 10 stories of his building’s east-facing windows as a result.

Barnett filed plans for the 169,000-square-foot hotel just over three years ago. The construction loan was about $175 million.

Buying low | $250M | Midtown

Fortress Investment Group affiliates refinanced the Sheraton Times Square Hotel, owned by MCR Hotels and Andrew Farkas’ Island Capital, with a $250 million, four-year, floating-rate loan. The debt was in forbearance until Fortress stepped in.

The 1,780-key hotel at 811 Seventh Avenue is one of the largest in the city, with 61,800 square feet of office space and a 23,000-square-foot ballroom. MCR and Farkas bought the hotel in 2022 for $373 million. The hotel last sold in 2006 for $738 million.

Bond, 365 Bond | $166M | Gowanus

Lightstone Group, with a hand from JLL Real Estate Capital, secured a $166 million refinance for 365 Bond Street in Gowanus that included a new $56 million mortgage from Freddie Mac. The loan is for five years and has a fixed rate.

Lightstone developed the 430-unit multifamily building in 2016. The building had helped secure a pool of commercial mortgage backed securities from Goldman Sachs, which has sought to shrink its exposure to commercial real estate debt. Gowanus had been a hotbed of real estate investment until the 421a tax abatement expired.

This was one of two large loans secured in December by the Lightstone Group. The other is below.

Darlehen, ja | $120M | Midtown

Deutsche Bank refinanced the Hilton Hotel New York Times Square West, built by Sam Chang’s McSam Group at 354 West 40th Street in Midtown, with $120 million. The German bank was the first to refinance the debt at the property with a $215 million loan in 2016, which Apollo Global Management took over before Goldman Sachs and UBS divided up the loan. The hotel has 200,000 square feet, 35 stories and 612 guest rooms. Rooms are priced from $165 to $225 per night.

Showing some Moxy | $110M | Lower East Side

An insurer owned by Apollo Global Management refinanced the Moxy Lower East Side hotel with a $110 million loan to the Lightstone Group. The 303-key hotel, part of Marriott’s Bonvoy brand, opened in late 2022 after securing construction financing from MSD Partners and Axos Bank the year prior.

Rooms are priced below $200 per night. With a city view, they reach $300 on the weekends. MSD Partners, a private creditor aligned with Michael Dell’s family fortune, made its bet on the Moxy and the return of budget tourism from a $1.1 billion real estate investment fund, to which the Dell family contributed $300 million. Bank OZK originated the acquisition loan for Lightstone’s 2018 purchase of the development site for nearly $28 million.

421a-OK | $85M | Williamsburg

Valley National Bank lent $85 million to David Bistricer’s Clipper Equity to refinance construction debt on Casa Hope, a 143-unit multifamily building at 130 Hope Street. Valley replaced Bank Leumi as the lender. The loan includes a new $16 million mortgage. The de Blasio administration approved plans for Bistricer’s 421a development in March 2020, days before the city went into lockdown.

In December, the median rental price for new development in Brooklyn was $3,900 per month, a decline of 2 percent from a year ago, according to a Douglas Elliman report. One-bedroom, one-bathroom units at 130 Hope Street recently listed for between $4,000 and $4,500 per month. No units are listed as available for lease.

What’s in store | $84M | Flushing

Argentic Investment provided $84 million for Blumenfeld Development’s acquisition of two self-storage facilities in Queens. Blumenfeld bought 34-09 College Point Boulevard for $72 million, or roughly $450 per square foot, and 62-05 30th Avenue for $51 million, or about $565 per square foot.

New York remains low on self-storage per capita despite a 50 percent increase in supply over the past decade, according to a Marcus & Millichap report. The Bronx led in self-storage rent gain last year, advancing 1.5 percent, and Brooklyn’s 1.1 percent increase was second. The citywide average price was $2.66 per square foot, according to the report.

DoBro deeds | $77M | Downtown Brooklyn

Deutsche Bank extended $77 million to Ohana Real Estate to purchase the Hilton and three retail condos at 140 Schermerhorn Street in Downtown Brooklyn. California-based Ohana paid $110 million to Tidal Real Estate for the property.

The hotel has 196 rooms across 104,000 square feet, and the condo units span 14,000 square feet, according to the building’s offering plan. In 2022, Ohana bought the Tillary Hotel in Downtown Brooklyn at a bankruptcy auction from a company tied to Isaac Hager.

Pinnacle Wiener | $65M | Upper West Side

Starwood Mortgage Capital refinanced the Hudson Park, a 172-unit multifamily building at 323 West 96th Street owned by Joel Wiener’s Pinnacle Group, with a $65 million loan that includes a new $11 million mortgage.

The loan covers Pinnacle Group’s ground lease and 50 percent fee interest in the Upper West Side property. It replaces financing from Mishmeret Trust, a firm that manages corporate bonds sold on Israel’s stock market to securitize U.S. real estate.

In 2017, Pinnacle raised $271 million under the name Zarasai Group on the Tel Aviv Stock Exchange, a year that Wiener appeared on Bloomberg’s list of billionaires. Pinnacle’s portfolio had 9,185 units, according to documents filed with TASE.

Rich Bockmann contributed reporting.