Delshah Seals $103M Construction Financing for Brooklyn Luxury Rental Tower

Bank OZK provided a $62 million senior loan in the deal, with EverWest Real Estate Partners providing a $40.5 million mezzanine loan.


Delshah Capital has kicked off 2019 with a bang and closed $102.5 million in construction financing for its 20-story luxury rental tower at 22 Chapel Street in Downtown Brooklyn, Commercial Observer has learned.

Bank OZK provided a $62 million senior loan in the deal, while Denver, Colo.-based EverWest Real Estate Partners provided a $40.5 million mezzanine loan. The financing has a 42-month term plus two one-year extension options. The deal closed on December 31 and was arranged by JLLs Aaron Appel and Michael Diaz.

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The project is Delshah Capital’s first ground-up development in Brooklyn and is being co-developed by OTL Enterprises.

The CetraRuddy Architecture-designed property—which fronts both Cathedral Place and Flatbush Avenue Extension—will include 180 luxury apartments, 25 percent of which will be affordable under the Affordable New York Housing Program. The development will feature 2,000 square feet of ground-floor retail space, 15,000 square feet of community space and a rooftop pool. Nonprofit Start Treatment and Recovery Centers contributed the land for the project and will be housed in the community space. Additional building amenities include 87 parking spaces, a fitness center, a lounge and a children’s playroom.

The deal is not being executed through Delshah’s Israeli public vehicle.

The developer was previously in negotiations with Moinian Group to provide a $95 million loan for the project, as reported by The Real Deal last August, but a deal couldn’t be reached and the two parted ways, with Delshah bringing in Bank OZK and EverWest shortly thereafter.

“It’s a great project for Delshah Capital, and we were excited to have worked with them to get it financed,” Appel told CO. 

Bank OZK also lent $60 million in Delshah’s $115 million acquisition of 30 Morningside Drive in Morningside Heights in 2016 (with Square Mile Capital Management providing a $17.5 million mezzanine piece in the deal).  

As for EverWest, “It was our first time working with them,” Delshah Founder Michael Shah said. “They were incredibly professional and very pleasant to deal with. They handled any issues that came up very quickly and we’d definitely work with them again.” 

Officials at EverWest did not immediately return a request for comment. Officials at Bank OZK declined to comment.