An investment group received the go-ahead to build a residential tower in Brooklyn, when it was approved for a loan of roughly $600 million from JP Morgan. The project is 95 percent owned by CIM, a private investment firm based in Los Angeles, whose founders make every effort to stay out of the spot light. The other five percent is owned jointly by Kushner Cos. and LIVWRK, a developer that frequently partners with Jared Kushner ‘s family company.
As reported by Bloomberg News, the partners had put out a request for a loan back in October, but the approval was stalled while the bank assessed the risks. Many banks have been slow to lend now as there is a fear that the NYC Real Estate market is already saturated. JP Morgan has become one of the main lenders in the city’s residential market. The interest rate for the loan has not been disclosed, as it is a private deal. Generally, construction loans, such as this, have an increased risk and higher rates than classic mortgages.
Kushner Cos. often takes on small equity stakes in projects while receiving fees for managing an developing the properties. In this property the two smaller partners will earn half of the $23 million total in fees for developing the tower.
CIM and Kushner Cos purchased the parking lot at 85 Jay Street for $345 million in December 2016, weeks after Jared Kushner’s father-in-law won the presidential election. The development project will transform the lot into a 21-story, 737-unit residential tower with 712 parking spaces, according to plans announced in August. The development project is estimated to cost a total of $1.1 billion, which will mean that the venture will likely require additional loans down the line. Back in August 2016, CIM and Kushner Cos partnered to purchase nearby Watchtower building, which had served as the headquarters of the Jehovah’s Witnesses, for $340 million.
By: Hadassa Kalatizadeh