Argentic Lends $31M on Caerus Group’s Office Play in LIC, Greenpoint
Caerus Group has locked in $30.5 million in fixed-rate debt from Argentic to finance a portfolio of two recently repositioned office properties located in Greenpoint, Brooklyn and Long Island City, Queens, Commercial Observer has learned.
The loan is backed by an office at 74 Kent Street, between Franklin and West Streets, in Greenpoint and at 11-20 46th Road in Long Island City. Together, the two office buildings total 65,000 square feet.
A Newmark (NMRK) Knight Frank (NKF) team led by Dustin Stolly and Jordan Roeschlaub, the vice chairmen and co-heads of debt and structured finance, along with senior managing director Daniel Fromm brokered the debt on behalf of Caerus.
“[Caerus] has done an incredible job redeveloping and leasing the assets, creating two best-in-class office buildings in the high-growth submarkets of Long Island City and Northern Brooklyn,” Roeschlaub said in prepared remarks. “[The properties’] tenancy will provide reliable and consistent cash flow while mitigating the need for ongoing leasing costs.”
In Long Island City, the four-story property was originally built in 1947 and was repositioned by the company in 2018, CoStar (CSGP) data shows. Educational services firm TheraCare occupies the entire building on a lease that expires in June 2034, according to CoStar Group data.
In Greenpoint, the four-story property — designed by Hustvedt Cutler Architects — is a 111-year-old former Eberhard Pencil Factory that was repositioned to office in 2017, according to information from CoStar.
The building is home to Project Franklin, a retail innovation incubator and subsidiary of Walmart, according to CoStar and confirmed by a source. Project Franklin is part of Walmart’s incubator program called Store No. 8, which has several operations working under a range of covert names, like Code Eight and Project Kepler. In January 2018, Project Franklin was announced, and Bart Stein, the former co-founder and CEO of Wim Yogurt, was tapped to head up the venture.
The Brooklyn property also hosts a branch of New York University Langone Health, which signed a 15-year lease in April last year to take nearly 17,000 square feet across the lower level and the ground floor, with the asking rent in the mid-$50s per square foot, as CO previously reported; NKF brokered that NYU lease arrangement.
“[Our] emphasis on layouts, use of space and location selection continues to play out in 2019,” Caerus senior managing partner Leo Tsimmer said in a prepared statement. “The team saw an opportunity to capitalize on great buildings and locations, and our effort was rewarded with appreciation from credit-rated tenants and quick absorption as a result.”
Argentic declined to comment on the transaction.