Barings originates $120m construction loan for Gowanus multifamily development

Joint venture between Canyon Partners Real Estate, Charney and Tavros contributes $64.4bn of equity to fund the deal.

Barings this week originated a $119.9 million senior construction loan for a joint venture between Canyon Partners Real Estate, Charney Companies and Tavros to develop a 260-unit multifamily property in Brooklyn.

The Charlotte-based investment manager finalized the deal on August 3. The project is being capitalized with $64.4 million of equity from the joint venture, which will use the funding for a multifamily development in Brooklyn’s Gowanus neighborhood.

“As Gowanus becomes a central community for families and young professionals, there is a growing need for modern, affordable housing in the area,” said Nicholas Silvers, founding partner at New York-based manager and developer Tavros. “With the neighborhood positioned for long-term growth, we look forward to providing apartment housing that will benefit both residents and the community.”

The debt for the 251 Douglass Street project was arranged by New York-based advisory Newmark and led by co-presidents of debt and structured finance Jordan Roeschlaub and Dustin Stolly, as well as executive managing director Chris Kramer.

According to an August 8 report from the Wall Street Journal, 10 potential lenders were initially in talks to finance the construction. Sam Charney, founder and principal at New York-based developer Charney, said five of those lenders dropped out this year because of market deterioration before Barings stepped up to originate the financing. “We were able to pull it off,” he said. “It was just more arduous and the economics were different than we had hoped.”

The property at 251 Douglass Street is slated to be a Class A, 15-story tower with amenities, ground-floor retail and parking. The project will also include 65 permanently affordable units as well as space for community and maker retail use.

The firms did not disclose an expected completion date with their August 3 announcement of the development.

Gowanus has attracted more debt capital in recent quarters and notably was upzoned in 2021 by the city’s government to allow for more multifamily development. Minneapolis-based US Bank and Little Rock, Arkansas-based Bank OZK have both originated more than $100 million in debt financings for developments in the neighborhood within the last year.

In January, Tavros, Dallas-based manager Canyon Partners Real Estate and Charney formed a joint venture to develop a 224-unit multifamily asset at 585 Union Street in Gowanus. The joint venture capitalized that deal with $57.7 million of equity and $107 million in senior construction financing from Beverly Hills, California-based Pacific Western Bank prior to its July acquisition by Los Angeles-based Banc of California.

The $107 million construction loan for 585 Union Street is under the management of Kennedy Wilson, who bought the loan as part of a $2.6 billion portfolio deal in May and in July hired PacWest’s commercial real estate department to work at the Beverly Hills-based manager. Toronto-based manager Fairfax Financial took a 95 percent stake in the Kennedy Wilson acquired portfolio on June 5.

The portfolio sale was one of three PacWest closed on to add liquidity to its balance sheet and avoid a similar collapse to other regional US banks, including Signature Bank whose commercial real estate loan portfolio is still out for sale following the New York-based bank’s March collapse.