Synapse Wraps Sale of Leasehold Interest in 280 Meeker Avenue to CW Realty
Synapse is retaining the fee interest and simultaneously closed a $15 million loan with Mesirow Financial.
Synapse Development Group has closed on the sale of a 99-year leasehold interest in 280 Meeker Avenue in Williamsburg, Brooklyn to CW Realty, Commercial Observer can first report. The deal closed yesterday.
The acquisition price couldn’t immediately be ascertained, but CW Realty intends to erect an eight-story, 69-unit multifamily building at the site, Justin Palmer, the founder and CEO of Synapse Development Group, told CO.
Synapse is maintaining the fee interest in the property and simultaneously closed a $15 million, 35-year, self-liquidating mortgage that was placed with Mesirow Financial. Cooper-Horowitz’s Richard Horowitz arranged the financing, while Chicago-headquartered Mesirow’s Andrew Minkus and David Fishler — based out of the firm’s New York office — structured the deal.
The Real Deal reported in November that a deal on 280 Meeker Avenue was in the works.
“We’ve owned the land in Williamsburg since 2013,” Palmer said. “We were putting together an assemblage up until 2016 and then made the decision last year that we didn’t want to develop right now as we were worried about the economy. [On March 26] we closed on the sale of the 99 year leasehold interest to CW Realty.”
Palmer previously worked for the Lehman Brothers Estate — before founding Synapse in 2012 — and has worked on several restructurings and complicated transactions over the course of his career. However, given current market conditions, “this was one of the most challenging — from a structural perspective but also because of the psychological component of what’s happening with the coronavirus,” he said. “It’s a real testament to the team and the structure that was put in place. People were working 15- to 20-hour days in the run-up to the closing.”
The long-term aspect of the leasehold interest served the transaction well.
“Someone with a shorter investment horizon may have seen things differently, but our goal was always to set this up as a long-term hold and we’re thankful to see this through,” Palmer said.
As for what’s next for Synapse, the firm is already on the lookout for future opportunities.
“We haven’t bought anything since 2016, partly because we’ve had our hands full with development projects and we also didn’t want to make any bad decisions while the market was heated,” Palmer said. “We’re opportunistic right now and are looking for good risk-adjusted returns. We’ve nothing to work out in our current portfolio and we’re looking to implement more of these ground lease structures on our existing portfolio and become a bigger player in fee simple space.”
Officials at CW Realty declined to comment.