Lonicera Partners and Quinlan Development are on the verge of putting together about $51 million in construction funds to build a residential rental property in Brooklyn Heights, Commercial Observer has learned.
The new project, targeted to local families, will hold 60 market-rate units, Tyler Wilkins, a partner at New York-based Quinlan, confirmed to Commercial Observer. Construction will be financed with a $36.6 million traditional mortgage from M&T Bank and $15 million in EB-5 funds, he said.
The luxury residence, at 157 Remsen Street, will start construction as soon as the low-rise residential and commercial buildings on the three-plot site are demolished, he said.
The EB-5 money is being sourced through NY Immigration Fund, which is still finalizing the paperwork, said Robert Roe, a vice president at NY Immigration.
The combination of EB-5 equity and traditional debt meant Quinlan didn’t have to bring in a J.V. partner, Mr. Wilkins said. Quinlan and Brooklyn-based Lonicera are co-developers in the project, both parties confirmed.
“It’s just cleaner,” without involving a J.V. equity partner, Mr. Wilkins said.
The project will hold larger apartments than the average in the area and also offer more bedrooms. The decision to build larger, to target Brooklyn-dwelling families was made due to the lack of family-appropriate housing in the immediate area, Mr. Wilkins said.
“When a three-bedroom opens up,” in the area “… some dirty play can occur,” he said, as families rush to beat the competition and secure the apartment.
The M&T loan has a total term of four years, with interest-only for the 24 to 30 months of construction, confirmed Matt Petrula and Jacob Weinstein of M&T. There is also an extension option for the mortgage.
The EB-5 funds are mostly assembled, said Mr. Roe. His firm bundled equity from Chinese, Korean and Indian investors, he said.
“Right now we … have the investors lined up, others are in the process of wiring the funds over,” he said.
In the past, NY Immigration Fund has worked sourcing EB-5 funds for the SLS hotel Park Avenue and the Knickerbocker Hotel.
“What EB 5 investors look for is a shovel-ready project,” he said.
Construction on the Remsen Street project is expected to begin in June, Mr. Wilkins and the bankers said.