Madison Realty Capital sells portion of $400M loan to Apollo at large development in Fort Greene

UPDATED: Madison Realty Capital through the entity 625 Fulton 1 LLC sold $300 million of senior participation in Madison’s existing $400 million loan to affiliates of Apollo Global Management, secured by the 1,046-unit residential project at 625 Fulton Street in Fort Greene, Brooklyn. The loan also includes two other tax lots. Madison Realty Capital retains control of the servicing and administration of the original $450 million loan.

The deal closed on March 29, 2023 and was recorded on April 4, 2023. The three properties have 1,099,353 square feet of built space according to a PincusCo analysis of city data. The loan price per built square foot is $363 per the PincusCo analysis. (The price per square foot analysis is the transaction price divided by square feet as reported in public records and assumes no air rights have been sold.)
The signatory for Rabsky Group was Simon Dushinsky. The signatory for Apollo Global Management and Madison Realty Capital was Urian Yap.
The parties divided the original $400 million construction loan that was recorded in 2021 into segments with Apollo’s Athene Annuity and Life Company holding $250 million, Apollo’s Aris Mortgage Lending LLC holding $50 million and Madison Realty Capital holding $100 million. The original construction loan was reported to be $450 million, but only $400 million was recorded. The Acris filings do not mention the additional $50 million, which represented a $50 million mezzanine loan, either in 2021 or in the new filings.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the properties for the past 24 months. In addition, according to city public data, the properties have received two DOB violations, $75,030 in ECB penalties, one housing violation, $76,830 in OATH penalties, and two housing litigations in the last year.

The borrower

The PincusCo database currently indicates that Rabsky Group owned at least 28 commercial properties with 2,251 residential units in New York City with 2,344,044 square feet and a city-determined market value of None. (Market value is typically about 50% of actual value.) The portfolio has $1.3 billion in debt, with top three lenders as Bank Leumi, Berkadia Commercial Mortgage, and Goldman Sachs respectively. Within the portfolio, the bulk, or 90 percent of the 2,344,044 square feet of built space are elevator properties, with industrial properties next occupying 6 percent of the space. The bulk, or 83 percent of the built space, is in Brooklyn, with Queens next at 17 percent of the space.

Correction: An earlier version of this post incorrectly identified this transaction as a refinance. It was not a refinance, it was a sale of a portion of the debt to affiliates of Apollo Global Management. Madison Realty Capital remains the owner of $100 million of the debt and the administrator of the entire package.

Direct link to Acris document. link