Spec Office in South Brooklyn
WRITTEN By Daniel Hilpert, Managing Director, Equicap
Nestled in the crook of the Belt Parkway, in the southwest corner of Brooklyn, Bay Ridge has an established real estate community, and is increasingly known for its growing retail corridors, 86th Street, 3rd Avenue and 5th Avenue. Taking a stroll down any of them, one could observe Gino’s or The Wicked Monk, two of the neighborhood’s longtime go-to establishments, among the newer and larger retailers, Century 21, Modell’s, etc. Coming in behind this wave of retail is an expansion of the neighborhood’s office space. Much of the neighborhood’s existing office space is on the ground floors of residential walk-ups, but not for long.
Equicap arranged a $13MM construction loan for a spec office building in the heart of the neighborhood. The borrower stated, “Equicap negotiated a non-recourse loan for us. Daniel Hilpert managed the process closely from inception to closing.”
Spec office construction is a difficult asset class, especially in a developing market like Bay Ridge, where it is not common. With many asset classes battered – changes in rent regulation affecting multifamily properties and challenging the retail business model, further affecting demand and thereby rents – many investors are gravitating towards office.
The borrower was looking for speed of execution, as the in-place debt was facing maturity. The borrower’s CFO said, “Equicap was able to close the complete construction loan while we were still in the process of negotiating the GMP with the contractor and buying out trades.”
“We’re looking forward to the next deal with them,” said Daniel Hilpert, “they have an eye for deals, and we enjoy helping them make their ambitions a reality.”
Equicap is a real estate investment banking intermediary firm arranging debt and equity for commercial real estate owners and developers. Email Daniel at email@example.com or call at 917-586-8364.