EDGEWATER, NJ-The New York office of Berkadia Commercial Mortgage recently arranged $41.5 million in interim construction financing for the 1 Main Street residential and retail complex here.
The second phase of a development of 495 residences and 100,000 square feet of retail at the Edgewater site is set to be completed on or about February 1.
Berkadia’s senior vice-president John DiCrocco arranged the financing through Berkadia’s bridge lending program for the developer, One Main Street Edgewater.
“Our origination and underwriting team delivered a financing solution that was precisely what the principals requested – a loan which enabled them to pay off an existing construction loan and recapture equity prior to project completion and stabilization,” said DiCrocco.
The 12-month loan includes a provision that enables the borrower to earn out additional loan proceeds as leasing and occupancy increases.
Berkadia has a long-standing relationship with the developer in this case, DiCrocco noted.
Generally, the commercial mortgage lending field is becoming increasingly competitive, say CMBS specialists.
“We are seeing a new level of aggressiveness and flexibility among lenders in all categories,” says Philip Mudd, a Washington, DC-based broker with Cassidy Turley in an article in Real Estate Forum magazine.
Commercial banks are offering construction loans with lengthier loan terms. Life insurance companies are offering construction-permanent loans and pushing into equity deals as well.
Commercial mortgage agencies are likely to lose some market share to other capital sources “trying to put money to work,” says Berkadia’s CEO Hugh Frater in the story.
Berkadia, based in Horsham, PA, services a mortgage portfolio of more than $200 billion a year.