NEW YORK, NY - Madison Realty Capital, an institutionally backed real estate private equity firm and asset manager focused on real estate equity and debt investments in the middle markets, announced plans to construct a 170,918-square-foot, 80/20 multifamily building on a development site located at the corner of Waverly Avenue and Atlantic Avenue in the Clinton Hill neighborhood of Brooklyn, New York. MRC is leading development of the site in partnership with USAA Real Estate Company.
MRC has acquired four properties, plus additional development rights from neighboring properties, through two off-market transactions, to assemble a 27,466-square-foot site with 170,918 square feet of development potential. Initially MRC purchased 551 Waverly Avenue for $23.5 million, and has now closed on three adjacent properties for $7.5 million to complete a large assemblage with frontage along Atlantic Avenue supporting ground floor retail. MRC also purchased development rights to increase the buildable area for its project. MRC and USAA Real Estate Company expect a total investment of approximately $88.5 million to complete the development project.
"This was a unique opportunity to assemble a large site and develop an institutional quality multifamily development with tremendous growth potential in this popular Brooklyn residential neighborhood," said Josh Zegen, Co-Founder and Managing Principal of MRC. "Limited supply coupled with enormous demand for quality market rate and affordable housing product in this area, and the development's 421a tax benefit, makes this project an ideal fit for our overall investment strategy, and exemplifies our ability to identify and maximize quality long-term investments with strong upside. MRC and our partner USAA Real Estate Co. look forward to its completion."
"This transaction reinforces USAA Real Estate Co's succinct Build to Core strategy of investing in Class A, urban in-fill, transit-oriented, multi-family, ground-up developments in high barriers to entry, growth markets across the U.S.," said Hailey Ghalib, Managing Director of Multi-Family Development for USAA Real Estate Company. Len O'Donnell President and CEO of USAA Real Estate Company also commented, "At USAA Real Estate Company, we are committed to the further expansion of our New York investment activity as this project meets all of our criteria. Likewise, we are enthusiastic about launching this partnership with Madison Realty Capital."
The development will consist of an eight-story residential building with a total of 191 apartments, including studio, one-bedroom, and two-bedroom units. The building will also have retail storefronts on Atlantic Avenue, one of Brooklyn's busiest thoroughfares and thus highly desirable to retailers. Approximately 27,515 square feet of the building will be below grade, and used for amenity space, storage space for tenants, and 96 parking spaces.
MRC and USAA Real Estate Co. intend to pursue a hands-on management approach to this development and will engage an experienced and competitive marketing team to lease up the property as it approaches completion.
In addition to the Waverly site, Madison is currently developing a mixed-use property spanning over 200,000 square feet in Clinton Hill, and has over 620,000 square feet of space in development in Manhattan and Brooklyn.