Madison Realty Capital has closed a $21 million first mortgage loan to fund the acquisition of an office building in Brooklyn, New York, the firm announced in a statement Wednesday. In addition to providing acquisition financing, Madison Realty has also agreed to provide $10 million in construction financing.
The property – a storage warehouse – will be redeveloped into office space, according to Madison Realty’s statement.
The firm has been very active in Brooklyn as of late, having announced $18.35 million in financings for four borough properties last week.
In May, Madison Realty announced that it had agreed to fund $13 million in financing for a defaulted note secured by a Clinton Hill property. That property broke ground in 2007 but the original developers were forced to declare bankruptcy during the financial crisis.
Earlier this month, Madison Realty closed its Sullivan Debt Fund above target on $350.4 million. The firm’s successful fundraising may have benefitted from the US regulatory environment, which constricts the ability of banks to originate mid-market loans, co-founder Josh Zegen told Private Debt Investor.
The regulatory pressure has also contributed to a more robust pipeline of potential deals for Madison. Zegen expects Sullivan Debt Fund, which has a reinvestment provision, to invest as much as $1 billion over the course of its fund life.
Madison Realty typically lends between $3 million and $50 million per investment, with a focus on multifamily condominiums, retail offices, industrial, student housing and medical offices. The firm offers one to three year terms with interest rates as low as 9 percent, according to its website.