62-Story Passive House Tower Scores $535M For Construction: This Week's N.Y. Deal Sheet
Alloy Development and the Vistria Group have closed on a $535M capital injection for the construction of what is set to be the tallest Passive House building in the world.
Under the deal, Vistria will invest more than $120M of equity, Alloy will put in $40M, and Kayne Anderson Real Estate will provide $375M of debt, the developers announced Tuesday.
The skyscraper, One Third Avenue in Downtown Brooklyn, is planned to rise 730 feet and provide 583 mixed-income units of housing, 153 of which will be permanently affordable. It will also offer 60K SF of office space and 30K SF of retail.
The 62-story tower is Vistria’s first ground-up development. The firm, with $17B in assets under management, invests in projects that it determines to have a social impact, including on global warming, deforestation or pollution.
Passive House buildings adhere to a standard for energy efficiency to reduce a building’s carbon footprint. One Third Avenue features a well-insulated building envelope and air filtration, as well as energy resources shared between the development’s residential and office space. Development also involves the adaptive reuse of two historic buildings from the 1800s on State Street and Schermerhorn Street.
“One Third Ave represents exactly the type of transformative development our real estate strategy was designed to support: delivering meaningful affordable housing while redefining sustainable urban living and forging public-private partnerships that achieve better outcomes for communities than either sector could deliver alone,” Vistria Head of Real Estate Margaret Anadu said in a statement.
Chris Peck, Nicco Lupo and Peter Rotchford of JLL Capital Markets managed the capital raise.
TOP FINANCING DEALS
The luxury condo development planned for the former site of Papaya King on the Upper East Side scored a $73M construction loan. ZD Jasper landed the debt from Madison Realty Capital for the project at 171 E. 86th St. The 18-story, 81K SF development is expected to cost $112M and include just 24 units, Crain’s New York Business reported. Arrow Real Estate Advisors’ Morris Betesh, Omar Ferreira and Jacob Petrovic brokered the deal.
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Vornado Realty Trust refinanced the debt tied to 44 E. 14th St. in Greenwich Village with $120M from Wells Fargo. The new debt replaces a loan of the same amount from the same lender, according to PincusCo. Vornado bought the retail building for $84M in 2017. The property has nearly 263K SF of built space and another 67K SF of air rights.
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Yitzchok Katz of Goose Property Management has landed a $96.5M refinancing from Berkadia Commercial Mortgage, PincusCo reported. The loan covers two Long Island City properties, at 32-03 and 31-11 39th Ave., with a total of 193 units. The new debt replaces a $78.4M loan from Affinius Capital.
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Popular Bank provided Jacob Landau and Pinches Abowitz with a $52M construction loan for a 212-unit project in Brooklyn's Bed-Stuy. The developers plan a 141K SF building for the site at 1832 Fulton St., according to PincusCo.
TOP LEASES
One year after signing one of the largest office leases of the year, American Eagle Outfitters is taking over more space at 63 Madison Ave. The retailer is adding 54K SF to its 338K SF in the building, Commercial Observer reports. The 15-story, 860K SF building is owned by a joint venture of George Comfort & Sons, Jamestown and Loeb Partners Realty. Savills’ Mitti Liebersohn, Ana Erickson, David Goldstein, Nate Brzozowski and Will Demuth brokered the deal for the tenant, while ownership was represented in-house.
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Prologis is expanding at 461 Fifth Ave., tripling its footprint from 6,900 SF to 23K SF across two floors, according to a release. Under the deal, the industrial real estate giant is subleasing space from an existing tenant vacating the building. Cushman & Wakefield’s Jason Kroeger, Pierce Hance and JP Southren represented Prologis in negotiations. The landlord, SL Green, was represented in-house.
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Self-storage platform Stuf is picking up 12K SF at Vornado’s One Park Ave. The lease, the company’s 10th in New York City, will bring 110 storage lockers to the office building. Stuf expects the new location to open this fall.
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Aldi has signed a 25K SF lease that will bring the cult favorite grocery store to Times Square, according to a release. The retailer plans to open the store, located at the base of Taconic Partners and National Real Estate Advisors’ 32-story tower at 312 W. 43rd St., next year. A CBRE team led by Lon Rubackin, Michael Kadosh and Bevan Cohen represented ownership. Aldi was represented by Ripco’s Esther Bukai.
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Law firm BraunHagey & Borden signed a 20K SF, 11-year lease to expand and relocate from the Flatiron District to Midtown East, according to the New York Business Journal and CO. The San Francisco-based litigator will take a full floor at George Comfort & Sons’ 200 Madison Avenue, moving from its 8,500 SF at 118 W. 22nd St. The landlord was represented in-house by Andrew Conrad. BHB was represented by Cushman & Wakefield’s Theodora Livadiotis.
TOP SALES
David Werner dropped just over $100M in cash on 440 Ninth Ave., Bloomberg reported. Taconic Investment Partners and Nuveen Real Estate spent $269M to acquire the 411K SF tower in 2018. The lender, a unit of MetLife, reportedly agreed to the short sale. The deal was brokered by CBRE’s Doug Middleton and Jack Stillwagon.
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Blake Partners, JAM Real Estate Partners and the Straus Group have flipped a Times Square West complex for a $14M gain. Nine months after acquiring 300 W. 43rd St. and 303 W. 42nd St. for $48M, the group has sold the mixed-use buildings to a subsidiary of Xin Capital for $62M, CO reported. The properties are connected at the base and total 145K SF, with office and retail. White Oak Real Estate Capital provided a $51M senior secured loan to the buyer.
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RXR sold the ground lease to the office building at 470 Clermont Ave. in Fort Greene, Brooklyn, for $69.6M. RXR bought the ground lease for $194.5M from GFI, PincusCo reported. The buyers, Lincoln Property Co. and Cross Ocean Partners, told CO that they plan to invest further into the property, which is cash-flowing. The lease runs through 2077, and the fee is owned by Solil Management.
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Austin-based MML Hospitality paid $92M for the Nine Orchard Hotel. Seller DLJ Real Estate Capital Partners came out of the deal with a significant gain, having bought the property in 2012 for $5.3M, PincusCo reported. The 71K SF hotel is at 9 Orchard St. in Chinatown and is a designated landmark.
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TF Cornerstone signed a ground lease with Brooklyn Hospital Center for a series of development sites in Fort Greene and Downtown Brooklyn. The deal includes portions of the hospital complex at 117 DeKalb Ave., the industrial building at 147 Ashland Place and the parking lot at 161 Ashland Place, PincusCo reported. The value wasn't disclosed.
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Vornado is under contract to buy the office condominium at 623 Fifth Ave. from Charles Cohen for $218M. The 36-story, 383K SF building was valued at $480M last year and $712M in 2023. The office space is 75% vacant, and Vornado plans to redevelop it into Class-A, boutique office space.
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An undisclosed high net worth individual has purchased the retail portion of The New York Times’ former building for $28M. The Kushner Cos. acquired the 248K SF space at 229 W. 43rd St. for $295M in 2015. The next year, it refinanced its mortgage with a $370M loan package from Deutsche Bank and SL Green. At the time, it was valued at $470M. Kushner lost the asset to foreclosure last year, with special servicer KeyBank, acting on behalf of the CMBS trustee, taking the keys.
CBRE’s Jack Stillwagon and Doug Middleton brokered the sale for the lender. BayBridge Real Estate Capital’s Jay Miller and AJ Felberbaum advised the anonymous buyer.
