M&T Financing Converted Brooklyn Complex
M&T Bank has agreed to lend $250 million to a Rockwood Capital partnership that redeveloped seven contiguous warehouses along Brooklyn’s waterfront into office and retail space.
The 443,000-square-foot complex, called Empire Stores, has an estimated value of about $415 million, putting the leverage at about 60%. The floating-rate loan will have a term of five years, including extension options. Eastdil Secured is arranging the financing for New York-based Rockwood and its partners, Midtown Equities of New York and HK Organization of Brooklyn.
The property is at 53-83 Water Street, near the foot of the Brooklyn Bridge, in an area that’s seen significant commercial and residential development over the past few years.
The brick warehouses, constructed between 1869 and 1885, were used mainly for coffee storage until the 1960s, when they were largely vacated. In 2013, the Rockwood group won the right to redevelop the site and signed a 96-year ground lease with the City of New York.
M&T provided the Rockwood group with $95 million of construction debt in 2014. A portion of the row of structures was topped with a glass-and-steel addition, increasing the size to six floors. About 370,000 sf is used for offices, 67,000 sf for retail space and the small remaining portion for other purposes.
The complex, which opened last summer, was 87% leased as of mid-June. It is among the few Brooklyn properties that command rents on par with Manhattan rates, and the lending assignment was said to have spurred stiff competition.
Home-goods retailer West Elm leases 140,000 sf for its headquarters and a retail store. Among the other tenants are United Technologies and several media companies, including advertising firm 72andSunny.