Castellan Capital Provides $28M Construction Loan for Kips Bay Condos

Developer Daniel Klaynberg has landed $28 million of construction financing to build a condominium tower in Manhattan’s Kips Bay neighborhood, Commercial Observer has learned.

Castellan Capital supplied the two-year loan with a one-year extension option for Klaynberg’s planned 12-story, 43-unit building at 129 East 28th Street, which was initially envisioned for rental apartments before switching to condos. Klaynberg, president of Spectra Construction & Development, filed an application for the 38,405-square-foot residential project last July, CO reported at the time. 

Paul Salib, managing principal of Castellan Capital, said the location of the project around the border of Kips Bay and NoMad was attractive due to its subway access coupled with being near a number of office buildings that have seen large-scale leasing activity of late from technology firms. 

“One of the reasons we like it is being close to public transportation, which is always important, but also the walkability of this location to Park Avenue South and the  23rd Street corridor where there’s a lot of tech leasing going on,” Salib gold CO. “Both the access to public transportation and the walkability of the location make it an ideal project to finance.”

Located on the western edge of Kips Bay, 129 East 28th, which has an alternate address of 120-124 Lexington Avenue, will include 2,681 square feet of commercial space and a 442-square-foot community facility. Z Architecture is designing the building and released a rendering in mid-March. 

Arrow Real Estate Advisors negotiated the financing with a team led by Alex Bailkin and  Andrew Rosenberg.

“120 Lexington represents the continued demand for well-located, boutique condo development in Manhattan that consistently attracts strong lender interest,” Morris Betesh, founder and managing partner at Arrow, said in a statement. “Arrow is pleased to have partnered with Castellan to deliver a structure that positions the developer for a successful execution of their project.”

Klaynberg did not immediately return a request for comment.

Andrew Coen can be reached at acoen@commercialobserver.com.