Slate Property Group expanded its presence in Jersey City over the last week with two short-term loans on multifamily developments for local sponsors.
The New York-based manager used its bridge lending platform to fund a $160 million loan that will be used to complete construction on a Jersey City multifamily development. The firm originated a separate $59 million loan in collaboration with McCourt Partners that will allow the sponsor to retire prior debt and fund lease-up costs at another multifamily tower.
Both originations speak to the financing gap that has emerged in recent quarters as interest rates have increased and senior lenders have taken more conservative investment stances, both in terms of proceeds and willingness to originate new loans. Alternative lenders have been stepping in to originate more mezzanine and bridge as banks have stepped back.
The $160 million bridge loan was originated for 618 Pavonia Avenue in the Journal Square neighborhood of Jersey City. The July 19 financing will be used by New York-based asset manager Namdar Group to retire $120 million in construction financing linked to the 27-story, 432-unit multifamily asset, known as 9 Homestead Place.
“In an environment that is making it extremely difficult to finance all types of development projects, our strong relationships and experience in the market are allowing us to get a large volume of deals across the finish line,” said Martin Nussbaum, co-founder and principal at Slate. The 9 Homestead Place financing marked the fifth deal between the Namdar Group and Slate’s lending arm, SCALE.
Meanwhile, the $59 million was funded in conjunction with Los Angeles-based manager McCourt Partners. On July 24, the pair originated a $59 million loan for Sequoia Development Group and Bushburg Properties to fund the final stages of construction on a 16-story, 285-unit multifamily asset in Jersey City’s McGinley Square neighborhood.
Developers Sequoia and Bushburg will use the Slate and McCourt funding to finish construction, lease-up and stabilize the asset at 711 Montgomery Street. The 2-year floating rate loan is being deployed mid-construction and the project is set to be completed in the first quarter of 2024.
Nussbaum said Slate’s experience and comfort with the Jersey City market gave the firm the confidence to step in when the development team needed to replace the existing lender at this late stage in the project. Coincidentally, the project is about a mile down from Slate’s prior financing for 9 Homestead Place.