Triangle Equities is set to break ground on a complex transit-oriented New Jersey mixed-use development via a $317 million loan that has an equally complicated capital stack.
The loan backing the development of The Crossings at Brick Church Station, an 820-unit mixed-used development adjacent to the train station in East Orange, New Jersey, is comprised of 22 different tranches of debt from 17 entities. An estimated 160 people worked on the loan, which will fund the first phase of development at 533 Main Street
in the town center.
Josh Weingarten, director of capital markets at the Whitestone, New York-based Triangle Equities, says putting the deal together was like a jigsaw puzzle.
“We constantly ran at the wall and ran into roadblocks and then we would pivot and try something new and come up with a creative solution, and then run at the wall again. That was how we attacked this,” Weingarten says.
While higher rates added a new wrinkle to structuring the deal, the transaction was a complicated one from the outset.
As Triangle Equities and its partner, Incline Development, were completing pre-development, it was apparent that liquidity was drying up as a result of the covid-19 pandemic and the broader economic fallout. The partners knew that in addition to traditional construction financing, it would be necessary to tap into tax credit programs and other incentives.
The final capital stack for the residential component of the project consisted of loans from Pittsburgh-based PNC, including a $63.8 million construction loan and a $24.35 million bridge loan. The bank is also supplying a $14.6 million low-income housing tax credit bridge loan and has invested $17.6 million of LIHTC equity.
The capital stack also includes a $2 million loan from the City of East Orange, and $46 million in direct equity from Goldman Sachs, Basis Investment Group, Triangle and Incline. The residential portion of the project is receiving $20 million in low-income tax credits from the New Jersey Housing and Finance Agency.
Finally, PNC, in its capacity as a Fannie Mae-Delegated Underwriter and Servicer lender, is also providing a forward commitment for $88.2 million of mortgage-backed securities upon the construction’s completion and lease-up period. Stifel Investment Bank has sold an equivalent amount of multifamily taxable mortgage-backed securities secured by US Treasuries until Fannie Mae delivers the mortgage-backed securities.
The project’s retail and site infrastructure includes a $17 million loan from the Reinvestment Fund in partnership with the Low-Income Investment Fund and BlueHub Capital, $15 million of new markets tax credit equity invested by PNC, $10.5 million from the New Jersey Infrastructure Bank, a $1.65 million Series 2022A Redevelopment Area Bond and $24.6 million of direct equity from the urban investment group within Goldman Sachs Asset Management, BIG, Triangle and Incline.
The project is also tapping into a $52 million new markets tax credit allocation led by PNC.
Once fully rounded out, the project will house 200,000 square feet of retail, restaurants and commercial space and 820 mixed-income rental units, as well as varied parking facilities. The retail space – of which more than 85 percent is pre-leased – will be anchored by a ShopRite grocery store.
2020 – The East Orange Planning Board approves an application to redevelop the site
2022 – The partners secure construction financing, break ground
2024 – The first phase of the project is slated for completion
Image: Triangle Equities