Alloy Development and The Vistria Group close $535 million in capital for second phase of Alloy Block

Brooklyn, NY Alloy Development (Alloy) and The Vistria Group (Vistria) have closed $535 million in capital for construction of the second phase of the Alloy Block and the tallest Passive House building in the world, One Third Ave. Rising to 730 ft., One Third Ave. completes the Alloy Block, joining the two projects in the first phase of development – 505 State St., New York City’s first all-electric skyscraper and 489 State St., the first two public schools designed to meet Passive House standards. One Third Ave. will also be one of the first projects to break ground under New York City’s “City of Yes” zoning, leveraging the improved rules to expand housing production, including high-quality, permanently affordable housing.

Vistria, a private investment firm that seeks to deliver both superior financial returns and meaningful impact, will invest over $120 million of equity to capitalize the development. In addition, Kayne Anderson Real Estate is providing $375 million of debt. This deal represents The Vistria Group’s first ground-up development for its real estate strategy, one of the nation’s largest dedicated affordable housing investment strategies, co-founded and led by Margaret Anadu. Chris Peck, Nicco Lupo, and Peter Rotchford of JLL Capital Markets managed the capital raise.

One Third Ave. will complete Alloy’s commitment to deliver 200 permanently affordable homes in Downtown Brooklyn. The first phase of the Alloy Block included 45 affordable apartments, and One Third Ave. will deliver 153 affordable apartments. Apartments will be located at the top of the building from floors 11 to 60 and will provide residents with the quality design that Alloy has made standard in all of its developments. The tower’s podium will consist of six floors and 60,000 s/f of office space, elevated 100 ft. above grade. One Third Ave. includes adaptive reuse of two historic buildings from the 1800s on State St. and Schermerhorn St., along with a new building on Third Ave., which will provide 30,000 s/f of retail space for the surrounding community. 

“Securing financing for One Third Ave. marks a pivotal milestone not just for this project, but for what we believe is the future of sustainable urban development,” said Alloy CEO Jared Della Valle. “As the second phase of the Alloy Block, One Third Ave. builds on our commitment to high quality design and adhering to the highest environmental standards, ultimately raising the bar across the industry. Thanks to our partners at Kayne Anderson and The Vistria Group for supporting this project as we work to tackle climate change on a large scale.”

“One Third Ave. represents exactly the type of transformative development our Real Estate strategy was designed to support: delivering meaningful affordable housing while redefining sustainable urban living and forging public-private partnerships that achieve better outcomes for communities than either sector could deliver alone,” said The Vistria Group’s head of real estate, Anadu. “As our first investment in new construction, we’re proud to partner with Alloy and Kayne Anderson on a project that will provide 583 mixed-income units of the highest quality in one of Brooklyn’s most dynamic neighborhoods.”

“We are proud to support our partners at Alloy and Vistria in bringing One Third Avenue to life,” said Lee Levy, senior managing director and head of real estate debt at Kayne Anderson Real Estate. “This project represents a powerful convergence of sustainability, design excellence, and community impact.”

The façade of the building will be designed with oversized 6-ft. by 7.5-ft. operable windows that offer sweeping views and let in natural light, while adhering to Passive House standards. An airtight, well-insulated building envelope and filtered fresh air will offer a healthy indoor environment with a low carbon footprint. The development’s residential and office spaces will share energy resources to minimize waste heat. 

One Third Ave.’s mixed-use tower will rise from an existing courtyard sitting behind the two historic buildings, providing a historical connection to the neighborhood. Entrances to the various uses are thoughtfully oriented to compliment the character of the adjacent streets. The residential lobby entrance will be within the existing building on State Street, a quiet, tree-lined block. In contrast, the commercial lobby entrance will sit on the busy corridor of Schermerhorn and the future Temple Square Plaza. Retail storefronts will stretch along Third Ave. between the historic structures and the new contemporary infill.

One Third Ave. follows the first phase of the Alloy Block and New York City’s first all-electric skyscraper, 505 State St. The 44-story tower located at the State St. and Flatbush Ave. intersection is a mixed-use development that redefines green living. The 441 apartments replace all functions typically run by natural gas with electricity, eliminating carbon emissions across the building and promoting healthier indoor environments. 505 State St. offers residents a suite of amenities, including a 3,000 s/f gym, a yoga studio, a grow room, playspace for children, and ample workspace. The building has set a new standard for energy-efficient, transit-oriented development, with more than 500 bike parking spaces and no parking for cars. Along with 30,000 s/f of retail space, 505 State St. is next to two schools that meet Passive House standards – the city’s first public schools to do so. 

Once complete, the Alloy Block will be the most sustainable block in Brooklyn, home to over 1,000 residences, including 200 permanently affordable apartments, 60,000 s/f of class A office space, 30,000 s/f of retail space and two Passive House public schools.