Madison Realty Capital has originated a $720m (€639.9m) loan to a joint venture between US property investors Metro Loft Developers and David Werner Real Estate Investments for an office-to-residential conversion project.
The real estate private equity firm focused on private credit said the loan has been provided to the partnership for the development and conversion of the former Pfizer headquarters consisting of two adjacent and connected office buildings in New York City.
The property at 219 and 235 East 42nd Street in Manhattan’s Midtown East will be transformed into a 1,602-unit multifamily building. The project is expected to be completed by the fourth quarter of 2027.
Josh Zegen, managing principal and co-founder of Madison Realty Capital, said: “By structuring flexible financing for the largest office-to-residential conversion in New York City’s history, we are enabling a new benchmark for luxury rental housing in Midtown Manhattan.
“Metro Loft’s track record executing complex office-to-residential conversions in New York City, combined with David Werner Real Estate Investments’ deep experience with high-profile, institutional assets, makes them an ideal sponsorship team for a project of this scale.”
Nathan Berman, founder and CEO of Metro Loft, said: “We’re thrilled to reach this major milestone in bringing our vision for this transformative development to life. We are grateful to our partners at David Werner Real Estate Investments and to our lenders at Madison Realty Capital for their confidence and commitment.”
David Werner, president of David Werner Real Estate Investments, said: “We are proud to collaborate with Metro Loft, a valued partner, on the transformation of the former Pfizer headquarters, a project that reflects our shared vision and commitment to revitalising iconic New York real estate.
“It was a pleasure to close a loan with Madison Realty Capital. They are an accurate and efficient lender, while providing flexibility where needed and the surety of execution. Their proactive involvement and professional coordination were instrumental in achieving our objectives.”
Max Herzog, Marko Kazanjian, Andrew Cohen and Max Hulsh of IPA Capital Markets, a division of Marcus & Millichap specialising in capital markets services for major private and institutional clients, secured the financing with Madison Realty Capital.
Herzog said: “David Werner Real Estate Investments and Metro Loft put together a best-in-class conversion project that enabled our IPA Capital Markets team to facilitate a competitive financing process.
“Madison Realty Capital demonstrated professionalism from the outset and executed flawlessly, resulting in a smooth and efficient closing. Once completed, this office-to-residential conversion will set a new standard for conversions, helping to meet the demand for Class A multifamily housing in New York City.”
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