$32M Loan Will Fund St. John's Hospital Project Completion

NEW YORK CITY—Madison Realty Capital reports it has provided another $32 million in financing for the St. John's Queens Hospital redevelopment project in Elmhurst. The new construction loan will facilitate the completion of construction of the mixed-use project being developed in Elmhurst.

In December of last year, Madison Realty provided $38 million in acquisition financing for the property at 90-02 Queens Blvd. bringing the total financing package provided to the unidentified sponsor to $70 million.

After the acquisition financing closed, MRC offered a conditional commitment to fund the remaining renovation of the property once the borrower received approvals on all building plans. Over the last eight months, the project achieved several construction milestones and is quickly nearing completion, Madison Realty reports. With the new construction funding, the sponsor intends to finish construction, obtain a certificate of occupancy and lease up the property. The 266,322-square-foot property was previously home to St. John's Queens Hospital, but has been closed since the hospital's operator filed for bankruptcy in 2009.

The previous owners obtained variances allowing for 148,109 square-feet of residential space and 118,213 square-feet of commercial and community space. Once complete, the property will offer retail space on the ground floor and in the cellar, community space on the second floor, 144 residential units on floors three through six and a penthouse on the seventh floor. The purchaser also acquired the adjoining four-story, 89,601-square-foot parking garage located behind the hospital building, which offers 290 parking spaces.

"Our familiarity with both the borrower and the project made us comfortable in providing additional construction financing. From the beginning, we recognized the many strengths of this adaptive reuse development given its prime location and strong sponsorship. The second round of financing we are delivering to complete construction demonstrates the continued confidence we have in its long-term success," says Josh Zegen, co-founder and managing principal of MRC.

Zegen adds, "Elmhurst is one of the most sought after neighborhoods within the Queens market given its great proximity to transportation, retail, and overall convenience. In fact, since we closed the acquisition loan for this project late last year, several other substantial projects in the Elmhurst market have exceeded expectations for both rent and absorption rates. Overall, we remain bullish on the Queens market and will continue to seek out other similar investment opportunities."