Madison Realty Capital Lends $48M on Manhattan Office Development

NEW YORK CITY – Madison Realty Capital has issued a $48 million senior loan to local developer Real Estate Equities Corporation for the development of 3 St. Mark’s Place, a mixed-use office project in the East Village, a submarket of Manhattan. 

Hana Financial Group arranged the financing. The South Korean financial services company approached MRC to provide the first mortgage loan alongside their $31.1 million of mezzanine financing to fully capitalize on the project. Hana Financial thought Madison Realty Capital was a fit because of the firm’s track record in the market and experience with construction lending, according to Josh Zegen, managing principal at the firm.

REEC entered into a 99-year ground lease for the boutique office property in 2017. The development will stand ten-stories tall and total 68,224-square-feet. Comprised of eight floors of office space, a fitness center, roof deck and 7,886 square feet of retail, the property is expected to draw tech tenants seeking a Class-A office experience outside of Midtown but proximity to transit, Zegen said. “We’re excited by the increased demand for this type of product and are confident that the asset is well-positioned to capitalize on the continued growth of this submarket,” he said in a prepared statement.

Located at the corner of St. Mark’s Place and 3^rd Avenue, the area has seen significant growth in the demand for office space from a range of tenants that include sectors such as tech, finance, law and family office tenants.

Adjacent to the site is  51 Astor Place, a 400,000-square-foot Minskoff Equities office and retail asset, home to anchor tenants such as IBM Watson and St. John’s University. Its tenant roster includes Shake Shack, Flywheel, Bluestone Lane and Orange Theory.

Nearby is New York University, Washington Square Park and the R, W, 6 and L subway trains.