Valley National, Bank Leumi, Be-Aviv Lend $50M on Newark Multifamily Build
By Andrew Coen March 13, 2023 9:00 am
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Tona Construction and Management and its joint venture partner KS Group have secured $49.9 million of construction financing to build a multifamily tower in Newark, N.J., Commercial Observer has learned.
Valley National Bank, Bank Leumi Le-Israel and Be-Aviv supplied the two-year loan for the JV’s 203-unit rental project at 50 Sussex Avenue in Newark’s University Heights neighborhood. Wayne, N.J.-based Valley National was the senior lender on the deal.
FM Capital arranged the transaction with a team led by Josh Pollack, Avi Eyal and David Wenger. The transaction carries a 75 percent loan-to-cost ratio and equates to 80 percent of actual costs when factoring in land values, according to FM.
“This property is a perfect illustration of the revitalization now underway in Newark’s central core,” Eyal said in a statement. “FM Capital leveraged our keen understanding of the real estate finance marketplace to deliver a competitive loan for this outstanding project.”
The 50 Sussex project will mark the first New Jersey development for Tona, which has a large portfolio in Brooklyn and Florida. Pollack noted that Tona used its own funds to pour 12 floors of concrete before the loan closed.
“We feel there is a lot of potential in Newark and are looking to continue to develop in the area,” Frank Tonacchio, vice president at Tona, said, noting that the company plans a similar-size multifamily project a few blocks away at 86-96 Norfolk Street featuring 234 units.
A 15-story complex, 50 Sussex will include 2,000 feet of ground-floor commercial space, is slated for completion in mid-2024. The INOA Architecture-designed property will have amenities that include a gym, a yoga room, a tenant lounge, a theater and outdoor recreation space. It is less than a mile from New Jersey Institute of Technology, Rutgers-Newark and Saint Michael’s Hospital.
Officials at Valley, Bank Leumi and Be-Aviv did not immediately return requests for comment.
Andrew Coen can be reached at acoen@commercialobserver.com
