Extell Closes on $530M Brooklyn Point Financing
The 720-foot tall skyscraper at the City Point development offers the highest rooftop pool in the city.
NEW YORK CITY—Extell Development Company has closed on $530 million in financing for Brooklyn Point at 138 Willoughby St. This is the firm’s first development in Brooklyn and at 720 feet high, it includes some attention attracting luxury features—such as the highest rooftop pool in the city. It is the only for-sale housing, the third tower, in Downtown Brooklyn’s City Point, a 1.8 million square-foot mixed-use development.
The financing consists of a $425 million senior construction loan syndication led by M&T Bank and a $105 million mezzanine loan from RXR Realty.
Gary Barnett, president and founder of Extell, stated the firm is known for developing prime luxury real estate including its architecture, interior design and amenities. “This transaction marks a significant milestone for our first development in Brooklyn,” says Barnett. “It is a testament to our excellent reputation with the lending and institutional investor communities as well as the level of confidence in Downtown Brooklyn.”
Barnett was quoted in The New York Times in February stating with Brooklyn Point, “‘We wanted something substantial enough to bring Extell from Manhattan.’” He added, “’To bring our kind of product,’ to Brooklyn.”
The New York Times had reported that the developer anticipates total sales at the 68-story building designed by architects Kohn Pederson Fox with interiors by Katherine Newman to reach $901 million. The 485 luxury condominium units range from studios starting at $850,000 to three-bedrooms priced at over $2.9 million. Under the 25-year tax abatement, the building will pay no taxes for the first 20 years, and a gradually increasing tax will begin in the last five years of the plan. This reduces the carrying costs to $655 per month, according to Extell Marketing Group.
The building includes health club-like facilities with a saltwater swimming pool, a 35-foot rock climbing wall, a yoga studio, sauna and steam rooms. There is also a lounge, bar, salon, co-working space, chef’s demonstration kitchen, wine library, game lounge, screening and performance room, landscaped terrace and children’s playing areas.
At an Ariel Property Advisors’ event last week, Paulo Garcia, SVP at Mercantil Bank, one of the banks in the loan syndication for Brooklyn Point said, “The absorption has been phenomenal. In the first month of sales, they closed on 50 units. That gives you an indication of the amount of demand that exists for a particular product in downtown Brooklyn.”
“Our strong sales velocity is an indicator of pent-up demand for high-quality ownership opportunities in this extremely desirable neighborhood,” says Ari Alowan Goldstein, SVP at Extell. He points to the design, amenities, view, price point and tax abatement as factors attracting tenants.
Brooklyn Point will be situated on top of a 600,000 square-foot complex of dining, shopping and entertainment attractions, anchored with the likes of Trader Joe’s, Target, Century 21 and an Alamo Drafthouse movie theater.
As first reported in The Real Deal the construction loan carries a 4% interest over Libor. The publication noted Extell must repay at least $100 million within the first 42 months from condominium sales on a sales schedule with $175 million generated by 24 months. The Real Deal also wrote that the mezz loan has a 10% interest rate with an option to extend in 15 months.