Wells Fargo Leads $185M Construction Loan for Bed-Stuy Multifamily Project
By Andrew Coen May 31, 2023 1:40 pm
reprints
A joint venture involving Douglaston Development, BEB Capital and Totem has sealed $185 million of construction financing to build a 17-story, mixed-income multifamily development in Brooklyn, the development team announced Wednesday.
Wells Fargo (WFC) led the loan along with M&T Bank (MTB) and BankUnited for Douglaston’s 474,000-square-foot project at 1057 Atlantic Avenue in Bedford-Stuyvesant, according to Douglaston. Funds managed by Ares Real Estate also acquired a preferred interest in the $320 million project, which is slated for completion in late 2025. The site previously housed a two-story garage.
Drew Fletcher, Paul Fried and Bryan Grover of Greystone Capital Advisors arranged the transaction.
The planned 456-unit rental development is one of the last new affordable housing developments eligible for a long-term tax exemption under the recently expired 421a tax abatement program, according to Douglaston. A total of 137 units will be designated as permanently affordable, with roughly two-thirds earmarked for those earning an average of 60 percent of the area median income.
“At a time when New York City is in vital need of more affordable housing options and expanded market-rate supply, we’re excited to bring another best-in-class housing option to residents of Bed-Stuy and the larger Brooklyn community,” Jeffrey Levine, chairman of Douglaston, said in a statement. “We are looking forward to expanding upon both our previous work within the borough and our deep relationships with Greystone, Wells Fargo, M&T, BankUnited and Ares.”
The 1057 Atlantic Avenue development will also include 31,000 square feet of ground-floor retail space. Residential amenities including a gym, lounge, golf simulator, game room, screening room, children’s playroom and roof deck.
Douglaston recently acquired the site for $66 million from a partnership led by BEB Capital and Totem, which had commenced foundation work in May 2022 after obtaining a rezoning to allow for residential use. BEB Capital and Totem co-invested in the project with Douglaston in a co-developer role.
“Wells Fargo is excited to be a part of this important project with Douglaston and Ares, bringing much needed affordable housing to New York City,” Anna Belobrovka, managing director in Wells Fargo’s real estate banking group, said in a statement.
Thomas M. Cornish, chief operating officer at BankUnited, said of the project, “we are especially pleased to support the expansion of affordable housing in Brooklyn and the greater New York City region.”
Matt Stabel, senior vice president, team leader, commercial real estate at M&T Bank, said “Douglaston’s enthusiasm for building quality market-rate and affordable housing resonates with M&T’s community-focused banking model. We are excited about the opportunity to partner with them on this project.”
—Andrew Coen can be reached at acoen@commercialobserver.com
