JPMorgan Lends $675M on Black Spruce’s Acquisition of American Copper Buildings
By Cathy Cunningham March 3, 2022 5:08 pm
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GO Partners, a new partnership between Black Spruce Management and Orbach Affordable Housing Solutions, has landed $675 million in acquisition financing for the American Copper Buildings at 626 First Avenue, Commercial Observer has learned.
JPMorgan provided the loan, in a transaction arranged by Cushman & Wakefield’s Gideon Gil and Zachary Kraft.
“We are thrilled to advise sponsorship in their acquisition of this trophy asset,” Gil said. “Lender interest for best-in-class multifamily rental assets remains strong. JPMorgan was able to deliver a customized execution for the sponsors’ business plan.”
CO first reported in December 2021 that financing was underway for the purchase, with “all options” being considered at the time.
Josh Gotlib’s Black Spruce and Meyer Orbach‘s Orbach Affordable Housing Solutions purchased the buildings from JDS Development Group and Baupost Group. The partnership paid $837 million, beating out heated competition for the buildings from sovereign wealth funds, pension funds, private investors and some traditional trophy office investors with a new eye toward multifamily trophy properties — the most highly coveted asset class through the pandemic — a source told CO at the time.
C&W’s Adam Spies, Doug Harmon, Marcella Fasulo and Adam Doneger negotiated the $837 million sale.
The 48-story property sits at 626 First with views of the Empire State Building, the East River and the Manhattan skyline. It’s also part of a strong residential market with unique demand drivers, located in the epicenter of New York’s life sciences corridor, but also within easy walking distance to Grand Central Terminal and the United Nations Headquarters.
Once occupied by a Consolidated Edison power plant, American Copper’s 6.4-acre site was purchased by JDS in 2013 for $172 million. Construction began in 2014, with American Copper West opening in April 2017 and American Copper East in late 2018.
Today, American Copper’s two high-rise residential towers are connected by a three-story sky bridge and comprise 761 residential units. The property is currently 97 percent leased, with amenities that include a rooftop infinity pool, a fitness center with a climbing wall, a spa room and a yoga studio. Onsite retail offerings include childcare provider Bright Horizons, and Hole in the Wall café and restaurant.
The property also benefits from a 421a tax abatement, which doesn’t expire until June 2038, per an offering memorandum shared with CO at the time of the acquisition.
The American Copper Towers acquisition adds to the 10,000 units already owned and managed by GO Partners, one of the most active investors in affordable housing in the country. The partnership has an active pipeline that also includes offices, hotels and parking garages.
Officials at JPMorgan declined to comment.
Cathy Cunningham can be reached at ccunningham@commercialobserver.com.
