White Oak, Thorofare Lend $22M on Tribeca Self-Storage Conversion Project
By Andrew Coen May 30, 2024 8:00 am
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Developer Yacov Smouha has sealed $21.5 million of financing for the acquisition and conversion of a former office and factory building in Tribeca into a self-storage facility, Commercial Observer has learned.
White Oak Real Estate Capital and Thorofare Capital supplied the two-year, floating-rate loan on 78 Walker Street, which Smouha acquired through the entity CSP Properties for $16 million from Dorothy W. Lu.
The loan will be used to fund the purchase of the eight-story, 1915-built building along with construction and lease-up of a new 30,540-square-foot self-storage facility that will be operated by Public Storage, according to the lenders. The project is slated for completion in early 2025.
“The project is in a great submarket in Manhattan for storage, and we believe this adaptive reuse will create significant value for all stakeholders,” Eric Tanjeloff, managing principal of the commercial real estate lending affiliate of White Oak Global Advisors, said in a statement. “We continue to find excellent value-add opportunities for real estate lending in this currently dislocated market and are pleased to further our partnership with Thorofare.”
Smouha did not immediately return a request for comment.
The project will consist of 300 self-storage units in a climate-controlled space. Tanjeloff noted that Tribeca is part of a market with the highest barriers to entry and highest rents for self-storage. The average occupancy rate among seven self-storage facilities within three miles of the project site is above 93 percent, according to Tanjeloff.
Public Storage is the nation’s largest public self-storage real estate investment trust and operates 3,310 facilities globally. The company has two other Manhattan locations at 428 East 92nd Street and 607 West 47th Street, according to its website.
The 78 Walker Street loan deal marks the second time White Oak and Thorofare have partnered on a self-storage transaction. The two lenders also provided $27.5 million of bridge financing to developer Marc Slayton for the lease-up of a newly expanded self-storage facility called GoodFriend Self-Storage in Cutchogue, N.Y., last August.
“Recognizing that self-storage sales activity has been muted in this continued state of high rates and challenging capital markets, self-storage has demonstrated its resiliency with stable cap rates and strong institutional investor demand in urban locations of primary markets,” Felix Gutnikov, principal and head of originations at Thorofare, said in a statement.
Andrew Coen can be reached at acoen@commercialobserver.com.
