Beech Street Capital closes $70 million Fannie Mae refinance

Beech Street Capital, LLC has closed a $70 million Fannie Mae conventional loan to refinance The Gotham, a 220-unit, 22-story high-rise apartment building. Brian Sykes, senior vice president in Beech Street's Boston office, originated the transaction. BlueGate Partners, a boutique advisory and transactional firm based in Manhattan, brokered the deal. The fixed-rate loan has a 10-year term, 9.5 years yield maintenance, and a 30-year amortizing schedule. The borrower sought a cash-out refinance of The Gotham to invest in other development opportunities and take advantage of historically low rates. The challenge was securing a loan that was large enough to compensate for the substantial prepayment penalty on its existing loan. In addition, the property was subject to a payment in lieu of taxes (PILOT) agreement with the city, which expired in 2020. This agreement would make underwriting especially complicated. The Beech Street team was undaunted. Working closely with Fannie Mae, Beech Street secured approval for a $70 million loan, meeting the borrower's cash-out requirements, and scoured the capital markets for terms that lowered interest payments by approximately 80 bps. Altogether, it closed the loan on the property in less than 45 days. "This was our second transaction with Beech Street in less than a year," says Chris Zirrith at Applied Capital, a firm owned by two of the key principals. "We were thoroughly confident that the complexity of the deal wouldn't slow them down and that they could deliver the terms we needed. They fully met our expectations!" The other principal is Panepinto Properties. Developed by the borrowers in 2000, The Gotham was the first luxury apartment in the city since the 1950s not located on waterfront. In addition to the 220 apartment units, the Gotham includes six occupied commercial spaces covering over 20,000 s/f on the ground floor and a 340-space, four-story parking garage. The units on the upper level floors are notable for panoramic views that encompass the Hudson River, the Manhattan skyline, and the Statue of Liberty. The Gotham is three blocks west of the Exchange Place PATH station and six blocks northwest of the Paulus Hook Ferry, providing convenient access to Manhattan. Additionally, it is near I-78.