It was a tight deal for an even tighter development. M&T Bank recently closed a $10.3 million construction loan for the creation of Manhattan’s first micro-unit rental property to be built in Kips Bay. The loan went to Brooklyn-based Monadnock Construction, which is leading the project’s development team, Mortgage Observer has first learned.
The nine-story “My Micro NY” project, located on the northeast corner of East 27th Street and Mt. Carmel Place, will consist of 55 prefabricated apartments averaging about 300 square feet with 40 percent of the units being offered at below market rates. The mini apartments will contain nearly 10-foot ceilings and seven-foot-wide balconies in addition to 16-foot-long overhead loft spaces and full closets.
“Modular construction is cost efficient and we believe these micro-units will fill a need in the Manhattan market,” said M&T Regional President Peter D’Arcy. “As one of New York City’s more experienced commercial real estate lenders, we’ve thoroughly reviewed the business case for this project and are very comfortable providing the financial support.” M&T declined to discuss the term and rate of the construction loan, which closed in March.
Monadnock and its partners, the Actors Fund Housing Development Corporation and New York-based architecture firm nARCHITECTS, won a competition to build the city’s first micro-units in early 2013. Installation of the 55 units, prefabricated by Capsys Corporation at the Brooklyn Navy Yard, began earlier this year. The micro-units, being installed on the site of an old surface parking lot near Bellevue Park South, are expected to be available for rent in 2015. The ground floor of the completed property will contain 678 square feet of retail space.
Additional financing for the $16.6 million project will come through equity provided by the project’s developers and a secondary loan from the New York City Department of Housing Preservation and Development.
“It’s exciting to pioneer this new housing type in association with the City and our partners, including M&T,” said Nicholas Lembo, Monadnock’s president. “It’s an ideal application for modular construction, and we’re proud to use this innovative approach to offer another affordable option to New Yorkers looking for housing that fits their lifestyles.”