Douglaston, Ares Cashing Out $116M in Hudson Yards Apartment Tower Refi
By Isabelle Durso July 23, 2024 4:54 pm
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Douglaston Development and Ares Management (ARES) are planning to cash out more than $100 million this week as part of the partners’ new $500 million mortgage for a Hudson Yards apartment.
The commercial mortgage-backed securities (CMBS) loan comprises the NYC Trust 2024-3ELV single-asset deal for their residential tower known as 3Eleven. The debt was co-originated by Goldman Sachs (GS) and Wells Fargo (WFC) with a two-year initial term, three 12-month extension options and monthly interest-only payments, according to a report by Kroll Bond Rating Agency.
Newmark and Greystone are said to have negotiated the financing.
Douglaston and Ares are expected to pocket $115.5 million in the deal for the newly built 60-story residential tower, with 938 total units, located at 311 11th Avenue at the corner of 11th Avenue and West 29th Street, according to Kroll. The property also has 14,495 square feet of ground-floor retail space.
Spokespeople for Douglaston, Ares, Goldman Sachs and Wells Fargo did not respond to requests for comment.
Proceeds from the mortgage — along with $60 million in mezzanine debt — will be used to pay the distribution to developers and also pay down the building’s $415 million construction loan, Kroll said. The transaction is expected to close Friday.
The debt comes at a time when many banks are requiring commercial real estate owners to infuse a considerable amount of equity into properties as a condition for refinancing their loans, but Goldman Sachs and Wells Fargo let Douglaston and Ares pocket a large sum of cash as part of the loan for 3Eleven, which is worth an estimated $930 million.
3Eleven opened its doors in May 2023 and, as of June 2024, the residential units in the building were 97.9 percent leased, according to the Kroll report. The apartment tower includes amenities such as on-site pet care and grooming, an outdoor pool, and a garage with 186 parking spaces.
Average asking rents for market-rate units in 3Eleven are $6,000 per month for a one-bedroom, $8,700 for two-bedroom apartments and $25,000 for three-bedroom units, according to Kroll. Those rates are typical for apartments in Hudson Yards.
Isabelle Durso can be reached at idurso@commercialobserver.com.
