Madison Realty lends G4 Capital $213.8M to finance $286M Rabsky construction loan in Gowanus

UPDATED  11:50 p.m., June 21, 2024: Madison Realty Capital through the entity 313 Bond Lender 1 LLC, lent $213.75 million to G4 Capital Partners as part of a participation loan, also known as a loan-on-loan, used to finance a $228 million senior construction loan G4 Capital Partners made to the Rabsky Group for two large project totaling 604 residential units in Gowanus. The senior loan was first reported in May, and is part of a $286 million financing package. The participation loan has not been previously disclosed. The participation loan and the senior and mezzanine loans all closed on May 23, 2024.

For the senior construction loan, the Rabsky Group through the entity President Union LLC borrowed $228 million from lender G4 Capital Partners through the entity G4 18231, LLC, for projects at 395 Carroll Street and 313 Bond Street, also known as 325 Bond Street. The total construction debt was $286 million, the Real Deal reported last month. The difference between the $213.75 million participation loan and the total of $286 million was senior and mezzanine debt provided by G4 Capital Partners, according to a person familiar with the transaction.

On these lots, there are two active new building construction projects, totaling 462,577 square feet. The larger is a new building project at 395 Carroll Street, job number B00645244, for a 425-unit, 313,348 square-foot residential (R-2) building submitted by Rabsky Group and filed by Rafael Rabinowitz with plans filed December 9, 2021 and permitted December 29, 2023. The other building was filed in February 2022 under job number B00650865, and has an address of 325 Bond Street. It has 179-units and 149,229 square feet. It has also been permitted.

The senior loan closed on May 23, 2024 and was recorded on June 3, 2024. The prior lender was G4 Capital Partners which held debt that had an original loan amount of $77 million.

The participation loan closed on May 23, 2024, but was recorded on June 20, 2024. The signatory for G4 Capital Partners was Robyn Sorid. The signatory for Madison Realty Capital was Urian Yap.

The borrower

The PincusCo database currently indicates that Rabsky Group owned at least 30 commercial properties with 2,750 residential units in New York City with 2,249,930 square feet and a city-determined market value of $355.1 million. (Market value is typically about 50% of actual value.) The portfolio has $1.9 billion in debt, with top three lenders as Bank Leumi, Madison Realty Capital, and Apollo Global Management respectively. Within the portfolio, the bulk, or 90 percent of the 2,249,930 square feet of built space are elevator properties, with industrial properties next occupying 7 percent of the space. The bulk, or 82 percent of the built space, is in Brooklyn, with Queens next at 18 percent of the space.

Clarification: A clarification was added to note that the difference between the $213.75 million participation loan and the total of $286 million was senior and mezzanine debt provided by G4 Capital Partners.

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