MRC closes $32 million constructon loan for redevelopment of former St. John's Queens Hosp.

Madison Realty Capital (MRC) has closed on a $32 million construction loan for a mixed-use development project incorporating residential, commercial, and community space at the former St. John's Queens Hospital, located at 90-02 Queens Blvd. in Elmhurst. The construction financing follows the initial $38 million acquisition loan provided by MRC in December 2013, bringing the total financing package from MRC to $70 million. After the $38 million acquisition financing closed, MRC offered a conditional commitment to fund the remaining renovation of the property once the borrower received approvals on all building plans. Over the last eight months, the project achieved several construction milestones and is nearing completion. With the new $32 million in construction funding, the sponsor intends to finish construction, obtain a certificate of occupancy and lease up the property. The 266,322 s/f property was previously home to St. John's Queens Hospital, but has been closed since the hospital's operator filed for bankruptcy in 2009. The property is located along Queens Blvd. between 57th Ave. and Woodhaven Blvd., across from the Queens Center Mall. The previous owners obtained variances allowing for 148,109 s/f of residential space and 118,213 s/f of commercial and community space. Once complete, the property will offer retail space on the ground floor and in the cellar, community space on the 2nd floor, 144 residential units on floors 3 through 6 and a penthouse on the 7th floor. The purchaser also acquired the four-story, 89,601 s/f parking garage located behind the hospital building, which offers 290 parking spaces and direct access from Queens Blvd. "Our familiarity with both the borrower and the project made us comfortable in providing additional construction financing. From the beginning, we recognized the many strengths of this adaptive reuse development given its prime location and strong sponsorship. The second round of financing we are delivering to complete construction demonstrates the continued confidence we have in its long-term success," said Josh Zegen, co-founder and managing principal of MRC. "Our vertically integrated expertise as an owner and developer as well as finance provider allows us to understand the needs of middle market sponsors better than most in this space. Madison remains one of the premier sources of capital for the middle market, particularly for construction financing. Many banks continue to pull back from providing construction loans to the middle market and we are pleased to provide an alternative for these sponsors." Zegen said, "Elmhurst is one of the most sought after neighborhoods within the Queens market given its great proximity to transportation, retail, and overall convenience. In fact, since we closed the acquisition loan for this project late last year, several other substantial projects in the Elmhurst market have exceeded expectations for both rent and absorption rates. Overall, we remain bullish on the Queens market and will continue to seek out other similar investment opportunities."