Brooklyn Community Lands $63M Refinancing

540 Waverly. Image courtesy of The Daten Group

The Daten Group, a New York City-based real estate investment, development and consulting firm, has secured a $62.5 million loan to refinance 540 Waverly, a newly constructed 135-unit, Class A multifamily development in the Clinton Hill section of Brooklyn, N.Y.

The loan was originated by H.I.G. Realty Credit Partners, an affiliate of H.I.G. Capital, a global alternative investment firm with $54 billion of equity capital under management. The initial loan term is for 36 months with two 12-month extensions.

The nine-story, mixed-use building at the intersection of Atlantic and Waverly avenues, was completed in October. In addition to the rental units, the property has 6,336 square feet of ground-floor retail and a 56-space enclosed parking garage. The building was designed by Kutnicki Bernstein Architects of New York City.

The developer purchased the site, located just outside the Pacific Park redevelopment area, from Verizon New York for $17.25 million in December 2019. SL Green Realty Corp. provided $58.5 million in financing for the development. At the time, The Daten Group had just completed 840 Fulton St., a similar building in Clinton Hill a few blocks from 540 Waverly. Other Brooklyn residential properties developed by the firm include 575 Fourth Ave. in Park Slope, 72 Poplar St. in Brooklyn Heights and 856 Washington St. in Prospect Heights.

The project contains 41 affordable apartments as part of the Affordable New York and Voluntary Inclusionary Housing programs. A lottery was launched in October for the affordable units for households earning 80 to 130 percent of the Area Median Income.

“The market-rate units are close to 70 percent leased,” David Ennis, founder & principal of The Daten Group, told Multi-Housing News. “The 41 affordable units are pending HPD (New York City Department of Housing Preservation and Development) paperwork, but the lottery closed on Jan. 3. We expect the first affordable tenants to be placed by late March.”

Property details

Units feature floor-to-ceiling windows, custom kitchen cabinetry, quartz countertops, modern chrome finishes, stainless steel appliances, white oak hardwood flooring and washers and dryers. Community amenities include a concierge, fitness center, landscaped rooftop terrace with grills, seating and cabanas. Other amenities include a tenant lounge with work/study space, billiards table and media/entertainment space as well as a package room, bike storage lockers and pet-friendly policies.

The property is near the Clinton-Washington Avenue subway station that is serviced by the C and A trains. Also nearby is the Atlantic Avenue-Barclays Center station with access to the B, D, N, Q, R, 2, 3, 4, and 5 trains and the Long Island Rail Road. The building is also close to the BAM Cultural District, Barclays Center, Brooklyn Museum, Brooklyn Botanic Garden, Prospect Park and downtown Brooklyn for those seeking a live-work-play lifestyle.

Michael Mestel, managing director at H.I.G. Realty Credit Partners, said in a prepared statement the firm is excited to be part of a well-built and well-located property in the growing Clinton Hill neighborhood. Mestel said the Brooklyn multifamily market continues to perform well and they have confidence in the project’s success.

Earlier deals

Last March, also in Brooklyn, H.I.G. Realty Credit Partners originated a $240 million loan to finance The Paxton, a 43-story, 330,000-square-foot mixed-use tower at 540 Fulton St. in downtown Brooklyn. The tower with 327 luxury apartments was nearing completion by developer Jenel Management at the time of the loan origination. Located at the intersection of Flatbush Avenue and Fulton Street, the building has 96 affordable apartments. The property also has approximately 109,000 square feet of office space and 21,000 square feet of retail space with frontage along Fulton Street.

More recently in November, H.I.G. Realty Credit Partners provided Panorama Holdings a $67 million loan to refinance Lumeo at Tryon Park, a 314-unit multifamily community in Charlotte, N.C. The property was 99.7 percent occupied at the time. Panorama had developed the property and completed lease-up in late 2021 shortly after construction concluded.