DTZ Secures Bridge Loan for Whitestone Residential Project
Despite DTZ’s recent acquisition of Cushman & Wakefield (CWK) and its backing from the global private equity giant TPG Capital, the real estate advisory firm still has an appetite for deals outside of the city’s most popular neighborhoods.
The firm’s capital markets group secured a $14.5 million bridge loan for an 18-acre, luxury residential development site at 151-45 Sixth Road in Whitestone, Queens, DTZ Senior Vice President Jeffrey Donnelly told Commercial Observer.
The loan from Toronto-based Romspen Investment Corporation covers environmental remediation of the property and pre-development costs, while providing a significant cash-out for the owners who had acquired the site in an all-cash deal, Mr. Donnelly said.
DTZ is getting ready to arrange a larger refinancing to allow for construction to take place, he added.
The 52-home community, being built by the New York-based development firm Edgestone Group, will include a park and pier, open to the broader Whitestone community, as well as a 52-slip marina along the Whitestone waterfront.
Edgestone purchased the land from the Bayrock Group, another real estate developer, for $11.3 million in November 2012, city records show.
“This is the last remaining development site of any meaningful scale on the Whitestone waterfront,” Mr. Donnelly noted. The 52 homes will range from 3,500 to 6,000 square feet and will carry asking prices that start at $2 million and exceed $5 million, he said.
“This was an exciting assignment, as most prospective lenders were able to see a strong loan-to-value ratio, strong home sale statistics, and the backing of a very high-net-worth developer,” said DTZ Vice President Ulrike Ahrens.
The job had its share of challenges, however, which limited the field of potential lenders, according to the brokers.
Edgestone is an overseas group with “significant development experience in China,” but the Whitestone development is their first major project in the U.S., according to Ms. Ahrens.
Additionally, “the previous ownership had fumbled an environmental remediation of the site, and our clients are forced to repeat the remediation process,” she said. “A good number of lenders could not get comfortable with the combination of foreign ownership and remaining environmental risk, however slight.”
The developers scaled back the luxury residential project earlier this year from an initial plan of 107 townhouses, following “a barrage of complaints” from local residents, The Wall Street Journal reported in May.
“We’re like a small town,” Marilyn Bitterman, the local community board’s district manager told the Journal. “New development should stick to what’s presently here.”
Representative for Edgestone could not be reached for comment in time for publication.