Thorofare, Pearlmark Lend $40M on Phase Two of Grubb Properties’ NoDa Project 


Grubb Properties has landed a $40 million financing package for the construction and lease-up of the second phase of the developer’s Link Apartments NoDa 36th  project in Charlotte, N.C. 

Thorofare Capital provided a $30 million senior loan in the deal, while Pearlmark provided $10 million in mezzanine financing. CBRE negotiated the deal. 

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The six-story, 242-unit multifamily asset represents the second phase in Grubb’s larger mixed-use development, which sits on the former site of the Herrin Brothers Coal & Ice Facility in Charlotte. As a Link Apartments community — which targets middle-income tenants — the first phase included 292 units and welcomed its first residents in December, while the second phase is approximately 80 percent through construction with delivery anticipated in the third or fourth quarter of this year. Grubb purchased the site in 2020. 

“The project is in a great neighborhood, located next to the 36th Street Lynx light rail station and with proximity to uptown,” Brian Bradley, Grubb’s development lead for the project, told Commercial Observer. “It fits in really well with the overall Link Apartments philosophy of well-located neighborhoods and walkable communities. It’s also located in an opportunity zone, so it struck a lot of chords for us.” 

Grubb, which now has a 60-year history, invests in several core markets across the U.S. in addition to Charlotte, including Winston-Salem and Greenville in North Carolina, Atlanta and Washington, D.C..

It also has a busy pipeline. The firm has what Bradley describes as a “plethora of apartments that are both being planned for construction, and currently for lease.”. 

“Overall, I’d say Charlotte continues to be strong,” Bradley said of the market’s multifamily sector. “There are a lot of units that are going to be delivered in 2024, but leasing velocity has been great, and overall, you know, the housing market nationwide is still short almost 4 million units — so there’s a long way to go in terms of meeting the current housing demand. Additionally, Charlotte remains a very desirable location to relocate to.” 

Thorofare’s David Perlman, a managing director at the firm, originated the debt alongside fellow managing director Jacob Yi and associate Scott Sumida

Of Thorofare’s attraction to the deal, Perlman said, “Grubb has a 60-year history and continues to innovate. The Link Apartments product is one that is impressively progressive, reinvigorating suburban office product by adding multifamily alongside it.” 

The deal represents Thorofare’s second financing in six months with Grubb. In November, the lender provided a $25 million loan for the lease-up of the developer’s life sciences property close to the University of North Carolina-Chapel Hill campus, as reported by Commercial Observer. 

Dave Stewart, vice president of finance at Grubb Properties, spoke of the challenges of the current financing environment, and the benefits of being a sponsor with Grubb’s history and track record. 

“Certainly, leverage is down for senior construction loans — and senior loans in general — and interest rates are up. That hits sponsors in terms of the amount of cash and equity needed in a deal being a little bit higher than we were originally pro-forma’d,” Stewart said. “That said, I think the reason that we’ve been able to secure construction loans as well as other financings over the last 12 to 18 months is the strength of our sponsorship. Grubb, being a 60-year-old company, has a really strong track record, has never provided a deed-in-lieu in our company’s history, and we’ve closed hundreds of millions of dollars of agency financing through Freddie and Fannie as well as HUD transactions.” 

Stewart said the company’s reputation, sponsorship profile, and the real estate in its portfolio that it continues to develop mitigates the risk that capital providers are wary of in the market at the moment. 

“We’re long-term hold [investors], so we can take fluctuation in interest rates and we’re typically equipped to handle cycles, because our hold profile is at least 10 years on most of our deals,” Stewart said. “It’s really what’s made lenders comfortable with us from a risk profile standpoint. Again, we feel like we’re very efficient in our development budget, as well as our pro forma, and can withstand some of those shocks to the system we’ve all experienced with rising interest rates.” 

For Link Apartments NoDa 36th’s second-phase financing, Grubb ran its typical process via CBRE’s Charlotte team and received “a healthy amount” of bids, Stewart said. “It was important for us to hold on to cash that we had at the fund level within our opportunity zone REIT, so we went with a group that was able to provide a little bit more leverage than traditional bank lenders could at that point in time,” he said.  

That group was Thorofare, who also brought in mezz lender Pearlmark to help capitalize the transaction.  

Both phases of the NoDa project have different amenity packages that, combined, include a clubhouse, a pool with sun deck, a fitness center, a yoga studio and coworking space. Residents will be able to access all amenities. 

Felix Gutnikov, Thorofare’s head of originations, said the deal illustrated the lender’s “creative approach to delivering reliable financing solutions for high-quality projects nearing completion in high-growth markets.”

Cathy Cunningham can be reached at