H.I.G. Realty Partners, an affiliate of H.I.G. Capital, originated a $240 million loan to finance The Paxton, a 43-story, 330,000-square-foot mixed-use tower in downtown Brooklyn, N.Y., with 327 luxury apartments that is nearing completion at 540 Fulton St.
Further details on the new loan were not disclosed. The Commercial Observer reported in December 2018 that Otéra Capital Investments and Apollo Commercial Real Estate Finance provided a $207.7 million construction loan to Jenel Management. Jenel, a private real estate investment and management company, is the developer of The Paxton, which is expected to deliver by the fall.
In addition to market rate units, the tower at the intersection of Flatbush Avenue and Fulton Street, will have 96 affordable apartments. Leasing is also underway for approximately 109,000 square feet of office space and 21,000 square feet of retail space with frontage along Fulton Street.
Michael Mestel, managing director at H.I.G. Realty Partners, said in a prepared statement the firm was excited to be part of a well-built, well-located property in the growing downtown Brooklyn market. He described the tower, designed by Marvel Architects, as having top-of-the-line apartments and commercial spaces.
Residential amenities include a full-time doorman, lounge, fitness center, business center, package and laundry rooms, roof deck and bicycle storage. The apartments will be on the 10th through 43rd floors. Offices, which will have floor-to-ceiling windows and numerous terraces, will occupy the third through eighth floors with retail on the first and second floors of the 511-foot-tall building.
The developers describe the location as a round-the-clock live/work/play environment. Situated in the heart of downtown Brooklyn, The Paxton is in close proximity to mass transportation including the 2, 3, 4 and 5 trains at the Nevins Street subway station and the B, D, N, Q, R and W lines at the DeKalb Avenue subway station. Neighborhood retail includes Macy’s, Century 21, Target, Nordstrom, Adidas, GameStop, Footaction and Duane Reade.
Construction of skyscrapers, including mixed-use towers like The Paxton, is booming in downtown Brooklyn. In September, RXR Realty and Douglas Elliman Real Estate launched leasing at The Willoughby, a 34-story mixed-use development at 196 Willoughby St. JDS Development Group topped out the Brooklyn Tower at 9 DeKalb Ave., in October. The 93-story luxury high-rise with 550 residential units is 1,066 feet and now the tallest building in Brooklyn. In July 2020, Extell Development completed the 68-story, 458-unit Brooklyn Point at 138 Willoughby St., which is 720 feet tall.
Other Brooklyn residential developments include 555 Broadway, a ground-up development in Williamsburg that is expected to be a partially-affordable housing property with about 300 units. SCALE Lending, an affiliate of Slate Property Group, provided a $137 million loan last month to a joint venture of Loketch Group, Joyland Group and Meral Property Group, for the acquisition of the property and construction.