Benchmark Real Estate, which focuses on acquiring and improving multifamily properties, has just closed on the purchase of an apartment building at 425 Third Avenue in Kips Bay for $44 million.
Jordan Vogel, co-founder and managing member of the company, confirmed the deal to The Mortgage Observer.
The company partially financed the purchase with a $36 million loan provided by Ares Commercial Real Estate.
The nine-story building is located between 29th and 30th Streets. It has 101 apartments at a total of about 61,000 square feet and three commercial units at about 5,000 square feet.
“We bought the building because we thought there was a disconnection between the current rents and the market rents,” said Mr. Vogel.
According to Ares, approximately $5 million in loan proceeds are expected to be drawn down over time and used primarily for renovations of the building.
“We are pleased to provide the sponsors with a senior mortgage for the acquisition and value-added renovation of this quality asset in a market with strong fundamentals,” Bruce Cohen, president and chief operating officer of Ares, said in a prepared statement. “Due to our flexible capital solutions offered through our direct originations platform, we expect to continue to produce attractive risk-adjusted returns on our loans, especially given the growing capital needs of qualified real estate owners and sponsors.”