Waterton Expands With Loan Purchase in NYC

Waterton Expands With Loan Purchase in NYC
CHICAGO, IL - In a move giving the company a loan acquisition in the highly desirable yet difficult to enter New York market, Waterton Residential recently acquired both the construction note and mezzanine loan for The Addison. The newly-constructed, Class-A apartment project is approximately 98% complete and is anticipating starting resident occupancy in March 2011. Originally developed by NorthEnd Equities, a commercial real estate firm based in New York City, the project was financed with a $110 million construction loan from iStar Financial and an approximately $24.5 million mezzanine loan from Archstone. Waterton acquired both the construction note and mezzanine loan from their respective original holders.

"The Addison represents Waterton's first loan acquisition in New York City, a market that has extremely high barriers to entry," said Max Peek, Waterton Residential's Vice President of Acquisitions. "Given the favorable supply/demand trends in the market, we are very bullish on the New York City metro area. Waterton is actively focused on finding new opportunities in New York, including additional loan purchases, recapitalization situations, and fee simple acquisitions."

The project consists of two attached buildings. The 221 Schermerhorn Street building is a 15-story structure containing 82 units with a mix of 40 studios, 14 one-bedroom units and 28 two-bedroom units. And, the 230 Livingston Street building is a 26-story structure containing 189 units with a mix of 25 studios, 64 one-bedroom units, 39 one-bedroom-with-home-office units and 61 two-bedroom units.

With a 109-car underground parking garage, The Addison also features an event room for private resident use, a fitness center, an outdoor community deck, refrigerated grocery storage, resident storage units, a lounge/recreation room and an entrance to the New York subway from within the building.

In addition, The Addison has two retail units, including a 5,394 sq.ft. space fronting on major retail hub Livingston Street and a 1,453 sq.ft. space fronting on Schermerhorn Street.

Located on a thorough-block site fronting on both Schermerhorn Street and Livingston Street between Hoyt and Bond Streets in downtown Brooklyn, two blocks north of Atlantic Avenue (which is the border of Boerum Hill) The Addison's main entrance is from Schermerhorn Street.

New York apartment broker Citi Habitats will handle the lease-up to stabilization of The Addison which will be managed by developer affiliated Northbroad Management LLC. Closing the transaction November 24, 2010, Waterton placed bridge financing on the property through a loan with Wells Fargo and plans to seek permanent financing once stabilization is complete.

The construction note and mezzanine loan for The Addison were acquired as part of Waterton Residential Property Fund X, a $222 million discretionary multifamily investment fund.

Chicago-based Waterton Residential, one of the leading multifamily companies in the nation, is focused on the acquisition and management of apartment communities in multiple markets to which it can add value through repositioning and renovation. Since its inception in 1995, the Waterton Residential team has remained committed to outstanding customer service by providing a community our residents are proud to call home. With over 15,000 apartment homes in 36 communities in 12 states the Waterton Residential brand signifies exceptional living experiences, a sense of community, and home. Waterton employs approximately 450 associates who are committed to achieving the Waterton Residential vision to be the leader in the multifamily industry.
Source: Waterton Residential

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