Longtime New York multifamily developer Douglaston Development has acquired a development site in Brooklyn and landed a construction loan to build a multifamily rental building over retail, likely one of the last that will be built using the now-expired 421-a tax break.

Douglaston paid $66M to acquire 1057 Atlantic Ave. in Brooklyn’s Bedford-Stuyvestant neighborhood from BEB Capital and Totem, the Manhattan-based developer announced Wednesday.

In conjunction with the sale, Wells Fargo agreed to lend $185M to a Douglaston-led venture for a 456-unit, $320M mixed-income rental development that will  add 31K SF of retail space to Atlantic Avenue.

Wells Fargo led the financing deal as administrative agent, partnering with M&T Bank as the deal’s lead joint arranger and BankUnited. Ares Real Estate also bought into the project as a preferred equity investor, while BEB Capital and Totem — which assembled the site in 2019 and 2020 — put equity into the project alongside Douglaston and will serve as co-developers.

“At a time when New York City is in vital need of more affordable housing options and expanded market-rate supply, we’re excited to bring another best-in-class housing option to residents of Bed-Stuy and the larger Brooklyn community,” Douglaston Development Chairman Jeffrey Levine said in a statement. “We are especially thankful to our lending partners for their support and confidence in light of an exceptionally challenging financing market.”

Drew Fletcher and Paul Fried of Greystone Capital Advisors arranged the construction loan and equity deals on behalf of Douglaston. TerraCRG brokered the land sale.

The development is expected to wrap up toward the end of 2025, which would make it eligible for the 421-a tax abatement, which can't be used for units opened after 2026.

BEB Capital and Totem began foundation work on the site last May.

“This partnership is the culmination of more than two years of collaboration with Totem, Ofer Cohen of TerraCRG and BEB Capital,” Jed Resnick, CEO of Douglaston Development, said in a statement. “Their dedication to growth in Brooklyn, excellence in design, and community engagement has earned the respect of the entire Douglaston team.”

The 474K SF development will reach 17 stories and will be made up of one-, two- and three-bedroom units. Approximately 137 of the units will be permanently affordable, with roughly 90 of those units reserved for New Yorkers making 60% or less of the area median income.

The property, which sits on the border of the Clinton Hill and Crown Heights neighborhoods, will feature 35K SF of amenity space, including a gym, lounge, golf simulator and landscaped roof deck.

The death of the 421-a tax break has resulted in a significant dip in developer interest in building housing in NYC. A recent report from the Real Estate Board of New York found that there were just 22 filings for new multifamily housing construction in April, making it the fifth consecutive month with less than 30 applications filed with the city’s Department of Buildings.

“Month after month, New York City’s housing supply crisis worsens as new development grinds to a halt,” REBNY Senior Vice President of Policy Zachary Steinberg said in a statement alongside the report. “The longer we wait to act to counter this housing supply crisis, the further behind we will fall.”