Customers Bank Makes $64M Construction Loan for Bronx Mixed-Use Development
The project will be one of the last to fall under the 421a affordable housing umbrella
By Brian Pascus September 29, 2023 1:23 pm
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Stellar Management and Karten Organization, a pair of New York City-based real estate investment management firms, have secured a $64 million construction loan to build a 197-unit residential building in the Mott Haven section of the Bronx, financed through the now-expired 421a tax abatement, Commercial Observer has learned.
To meet the 70/30 blend of market-rate housing and affordable housing as required by the 421a program, the building will include at least 59 affordable housing units. These will be paired with at least 140 luxury residential units.
Customers Bank provided the construction financing, while the Walker & Dunlop team of Aaron Appel, Jonathan Schwartz, Adam Schwartz, Keith Kurland, Christopher de Raet, and Ari Hirt arranged the transaction on behalf of the sponsors.
Located at 580 Gerard Avenue, the building will sit near the 149th Street Grand Concourse subway station, which provides access to the subway’s 2, 4 and 5 lines and multiple bus lines. Nearby landmarks include the Harlem River, Yankee Stadium and Bronx Terminal Market.
The foundation for the construction is already underway, said a source close to the transaction. The multifamily building will contain only one- and two-bedroom units and feature a fitness center, rooftop terrace, tenant’s lounge with a media room, coworking space, and a pet spa.
The building is part of the 421a option-C carveout, which expired last year and had provided developers with a tax abatement of 10 years or longer in exchange for reserving a certain percentage of units in their buildings for the affordable housing market. Between 2013 and 2023, more than 3,000 properties, and 117,000 units, had utilized the program, according to the Furman Center at New York University.
The program was not renewed after a contentious series of negotiations among legislators in June 2022.
Stellar Management was founded in 1985 and has more than 13,000 apartments and 3 million square feet of office and retail space under its investment and management umbrella, according to the firm’s LinkedIn page.
The Karten Organization is a family-owned firm that has developed or repositioned more than 500,000 square feet of property since the 1960s, according to the firm’s website. Projects include 900 Avenue of the Americas, a 300-unit luxury, mixed-use residential building; and The Rail at Red Bank, a 200-unit, mixed-use luxury residential building in Red Bank, N.J.
Brian Pascus can be reached at bpascus@commercialobserver.com
