Long Island City’s Tallest Apartment Tower Scores $425M Construction Loan
BLDG Management Co. has landed a huge construction loan that will allow it to develop what will be the tallest residential building in Long Island City.
A coalition of lenders led by M&T Bank, U.S. Bank and Bank of China, along with Israel Discount Bank of New York, City National Bank and Bank Hapoalim, came together to provide BLDG a $425M construction loan for a 69-story luxury rental tower in Long Island City.
Real estate finance company Greystone's Drew Fletcher, Paul Fried and Bryan Grover arranged the debt for the 824-unit tower, according to a release.
Financing deals have been notoriously difficult to put together in New York City following the expiration of the state’s 421-a program last summer and the Federal Reserve’s consecutive interest rate hikes.
"Despite the challenging market, this significant financing demonstrates that there is still strong lender appetite for high quality multifamily projects, especially with an affordable component,” Fletcher said in a statement.
The property, which BLDG has dubbed The Orchard, will be the tallest residential tower in the sought-after Queens market, reaching more than 800 feet. It is one of the final projects eligible for the 421-a tax abatement, with 30% of units to be set aside as affordable housing in exchange for a 35-year tax break. That sets BLDG up with a tight timeline: In order to qualify, the tower has to be completed by June 15, 2026.
Still, investors are looking toward trusted partnerships they believe capable of delivering 421-a projects in time for the program’s deadline. Last month, Wells Fargo lent $185M to Douglaston Development, working in partnership with BEB Capital and Totem, for the acquisition and development of a 456-unit multifamily project in Brooklyn’s Bedford-Stuyvesant.
The city’s housing supply crisis appears unlikely to ease soon, with high demand for apartments resulting in soaring rents amid a supply squeeze. Construction data from 2010 to 2020 showed that just 10% of multifamily buildings in NYC were built without any subsidy, while 70% used 421-a, according to an analysis from the New York University Furman Center for Real Estate and Urban Policy.
The Orchard will also have 207 parking spaces and 13K SF of retail. It will also have 100K SF of amenity space for tenants, including a privately owned landscaped roof deck spanning a little over 65K SF, a 24-hour lobby, a fitness center, indoor and outdoor pools, a spa and a children’s playroom.
“The Orchard is a reflection of our deep commitment to building best-in-class multifamily rental projects that expand access to housing and benefit the communities in which they serve,” Lloyd Goldman, founder and president of BLDG, said in a statement. “We are also incredibly thankful to our trusted lending partners for their support and confidence despite the exceptionally challenging credit environment.”