Minority-Owned Standard REI Closes First NYC Equity Investment in Bushwick
Standard Real Estate Investments (Standard REI) has closed a $30 million equity investment in a mixed-use development project located at 1333 Broadway in Brooklyn’s Bushwick neighborhood, Commercial Observer can first report.
The deal marks the minority-owned private equity firm’s first foray into the New York City real estate market. JLL Capital Markets arranged the majority equity stake and simultaneously arranged construction financing for the venture with Santander.
The transaction was negotiated by JLL (JLL)’s Rob Hinckley, Jeffrey Julien, Steve Rutman, Nicco Lupo and Patrick Madigan. JLL’s Peter Rotchford, Christopher Peck and Christopher Pratt negotiated the construction debt.
Ekstein Tolbert Development will work with Standard REI to build a 107-unit, 20-story mixed-use building on the 30,766-square-foot site. The development has a total project cost of $76 million. JLL also represented the sponsor in the deal.
“The acquisition of the site and development of a mixed-use property with an attainable residential component as a sizable portion of the project fits seamlessly with our investment philosophy,” Jerome Nichols, co-founder and president of Standard REI, said in a prepared statement.
“We look forward to working closely with Erik Ekstein and Kevin Tolbert, principals of Ekstein Tolbert Development, in bringing 1333 Broadway to fruition as we focus on improving access to capital for minority- and women-owned developers while constructing much-needed affordable and market-rate housing,” he added
When completed, 1333 Broadway will feature ground-floor retail and a three-story commercial component, already master leased to Empire Rehearsal Studios, in addition to 15 stories of housing — 30 percent affordable and 70 percent market-rate rental apartments.
Units will feature a blend of studio, one-, two- and three-bedroom units. Amenities will include gym and laundry facility in the basement level, bicycle room, package room and 50 parking spaces. The property will benefit from a 35-year 421a tax abatement and a 25-year ICAP tax abatement for the commercial space.
“Brooklyn, and really the greater city, has certainly experienced an immense V-shaped recovery as the apartment vacancy rate hovers below 2 percent again, and 1333 Broadway will arrive on the market at a time of ever-increasing demand in transit-oriented, newly built and well-amenitized Brooklyn properties,” Hinckley said. “This will be a highly attractive property providing much-needed new commercial space, fair-market and affordable housing.”
In addition to Standard REI’s investment in the development of 1333 Broadway, the firm is currently targeting another $300 million in new development started this year. The investment also follows Standard’s acquisition in January of a seven-property land assemblage in Washington, D.C.,’s Ward 8. Trammell Crow Company will execute the leasing and development of the site’s 240,000-square-foot office component with Standard REI. NHT Communities will develop 179 apartment units for D.C. residents earning between 30 percent and 80 percent of the area median income.
Ekstein Tolbert Development officials did not immediately respond to a request for comment.
Emily Fu can be reached at efu@commercialobserver.com.
