Pembrook Capital Management LLC, a commercial real estate investment manager, has closed on a $25.8 million mezzanine loan with a first mortgage conversion feature, to an affiliate of McSam Hotel Group to finance a West Side development site.
Stuart J. Boesky, Pembrook’s CEO, said the financing is secured by a through-block development site located within the Hudson Yards Redevelopment Area, with frontage on 38th and 39th Streets just east of Ninth Avenue.
The borrower plans to develop site and demolition of existing structures is currently underway. Construction is expected to commence in 2017.
The purpose of the loan is a refinancing to facilitate a partner buyout and for predevelopment. “We’re pleased to provide this customized financing to suit the needs of the sponsor, an experienced New York builder and repeat client,” Boesky said.
“In the current financing environment, it can be challenging for borrowers to secure funding for non-cash flowing assets like development sites, regardless of their location and value, so it’s gratifying to be able to execute this deal. This well-located site should be positioned to succeed given the developer’s attractive basis and overall growth of the Hudson Yards area.”
Pembrook is an SEC-registered investment adviser that manages commercial real estate private equity funds focused on debt strategies.