MRC Provides $168M Construction Loan for Jersey City Multifamily Project
By Matt Grossman November 6, 2019 4:25 pm
reprints
Manhattan Building Company has picked up a $168 million construction financing package from Madison Realty Capital to fund the first phase of a massive multifamily project in Jersey City, N.J., Commercial Observer can first report.
The debt will fuel Manhattan’s work on Emerson Lofts, envisioned as an eventual 1,000-unit complex at 315-326 15th Street in the growing secondary city, New Jersey’s second largest after Newark. MRC’s loan will back the project’s first phase, a 26-story, 350-apartment tower that would also include 10,000 square feet of commercial space.
Future plans for the site, for which the MRC financing provides pre-development money, also include the conversion of a 600,000-square-foot industrial building — formerly the Emerson Radio Factory — into loft-style apartments. Blueprints also contemplate two other ground-up residential construction projects.
Developer Jeffrey Gural‘s family owns the land under the ambitious apartment project and Manhattan Building controls the leasehold interest through a 99-year deal with the Gurals, according to sources familiar with the site’s history.
The site, just north of the entrance to the Holland Tunnel and approximately level with Manhattan’s West Houston Street, lies amid a raft of new construction along the Jersey City waterfront. In a running project last updated in 2018, Jersey Digs, a local real estate website, counted nearly 40,000 planned residential units in the city, with about a quarter of those actively under construction.
And given that the jurisdiction of New York State’s new developer-vexing rent-regulation law ends abruptly in the middle of the Hudson River at the New Jersey state line, cross-state interest in Jersey City development has ignited more ferociously yet, according to Josh Zegen, MRC’s founder.
“If you look at investment sales, there are a lot of people looking at New Jersey because of [rent regulation in New York],” Zegen said. “Since those changes in June, it’s driven money outside the City, and although Jersey’s always been a market of interest, that’s only accelerated.”
The steady pace of commercial development on Manhattan’s West Side — such as at Hudson Yards and the redevelopment of the World Trade Center — has also spurred along the Jersey City apartment market, he noted.
“Especially with what’s going on in New York, I’m definitely seeing a lot more investor appetite in New Jersey in general,” Zegen said. “If anything, it may be more convenient to get to places on the west side of Manhattan from Jersey City than from places in Brooklyn and Queens.”
The project’s size and scope implies that construction would likely take two and a half to three years, the lender said, emphasizing that the timetable was an estimate.
Manhattan Building Company did not respond to a phone call.
