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Debt & Equity

Dermot lands $140M loan to pay off 66 Rockwell debt

Richard Bassuk, Chief Executive Officer of The Greystone Bassuk Groupannounced the closing of a $140,000,000 credit enhancement for The Dermot Company.

The loans was provided by Helaba Landesbank Hessen-Thuringen under The New York State Housing Finance Agency 80/20 Program for an affiliate of  Dermot  and its partner, Lowe Enterprises Investment Management LLC as investment advisor on behalf of the Commonwealth of Pennsylvania State Employees Retirement System.

The financing was structured with $90,000,000 of 2010 Series A low floater tax-exempt bonds; $9,000,000 of 2015 Series A low floater tax-exempt bonds; and $41,000,000 of 2015 Series B low-floater taxable bonds issued as permanent financing for 66 Rockwell Place (a/k/a 29 Flatbush Ave) in Brooklyn, NY.

66 Rockwell
66 Rockwell

Proceeds from the financing were used to repay Dermot’s existing construction loan and reduce the developer’s equity in the project.

66 Rockwell is a 42-story, 326-unit luxury apartment building located on the corner of Flatbush Avenue and Rockwell Place in Fort Greene neighborhood of Brooklyn. 66 of the apartments have been designated as affordable housing units rented to tenants whose household incomes are at or below 50 percent of the New York City Area Median Income, and 10 of those units are rented to tenants whose household incomes are at or below 40% of AMI.

The remaining 260 units are rented as market-rate apartments. The building also contains approximately 7,000 s/f of retail space and approximately 40,000 s/f of garage parking.

Bassuk said, “Dermot has its finger on the pulse of the high-end Brooklyn rental market and at just the right time is bringing to market an amenity-rich, well-designed development with breathtaking views.”

Drew Spitler, a principal of Dermot said, “We had goals in mind when approaching the market with this refinancing, and with Greystone Bassuk representing us, we exceeded them all.”

Steve Benjamin, COO of The Dermot Company added, “We could have simply approached our existing construction lender to convert to a permanent
loan, but we made the right business decision in utilizing Greystone Bassuk to advise us on this transaction. Greystone Bassuk was an exceptional partner for this venture because of their understanding of the marketplace, their ability to drive lender demand and secure favorable loan terms, and their skill in managing both the private lender and public agency. Working with them actually allowed us to exceed the goals we set for this refinancing.”

The terms of the loan were driven by the wide range of interest created for providing this loan, according to Bassuk, who was joined by Greystone Bassuk Managing Directors Jeffrey Levien and Drew Fletcher in this transaction.


“We understood Dermot’s objectives and sensitivities and approached a broad range of lenders,” said Bassuk. “Throughout the proces,s Helaba was sensitive to the borrower’s needs and demonstrated a willingness to make this the right fit for both parties.”

The loan contains several unique features such as upfront financing of the Low Income Housing Tax Credit cash flow to be received by Dermot over the next 10 years, and a multi-year earn-out allowing Dermot to draw additional proceeds as residential and commercial revenue increases.

Furthermore, the 10-year loan term and the  attractive amortization schedule (which comes close to approximating an interest-only loan) were both structured, together with an extended IO period, to maximize cash flow after debt service and secure today’s  interest rates for a significant period of time.

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