Another day, another buzzer-beating construction loan from J.P. Morgan Chase.
The world’s largest commercial bank provided $75 million in construction financing to Brause Realty for its 20-story building with 157 apartments at 729 Second Avenue in Murray Hill.
The rental offering will include 48 affordable units in order to receive the 421a tax abatement, a tax-relief program that spurred new development projects.
The program expired in the summer of 2022 for projects that did not already have its footings in the ground, and a construction deadline looms ahead for the summer of 2026. The program was targeted by critics for not supplying enough apartments to middle- and low-income households.
Lenders have their own requirements, however, and projects must generally be completed a year ahead of the city’s deadline and meet construction targets along the way. A failure to hit such benchmarks can be considered a default of the loan agreement.
Construction has been underway at the project, also known by its address at 251 East 39th Street, since October, according to Brause. The structure will span 154,000-square-feet and rise 220 feet on the corner of Second Avenue and 39th Street. CetraRuddy is the architect of record. Renderings show a glass facade with a series of setbacks beginning on the 15th floor.
JP Morgan recently loaned nearly $75 million for a multifamily project in Gowanus, a real estate market brought to life by a neighborhood rezoning in 2021, but which has cooled significantly since New York’s legislature allowed the program to expire without a replacement lined up.
The Brause family has owned portions of the development site since the 1960s, Brause president David Brause told Crain’s last summer. The company did not immediately respond to a request for comment about the project’s construction financing.
Brause Realty began as a stationery store in the 1920s, according to the company’s website, before owners Jack and Samuel Brause realized that trading real estate was more lucrative than selling paper, pens and envelopes.