ABOVE: Pictured from left to right are Madison Realty Capital managing principals and co-founders Josh Zegen and Brian Shatz and Adam Tantleff, managing principal of Investor Relations.
Last year was a record year for Madison Realty Capital’s (MRC) debt business with $1.5 billion in originations. It was also a record year for MRC in terms of deal sizes, with the firm providing larger loans than ever before and helping to fill a “huge void in the construction lending market,” said co-founder Josh Zegen
In July, the company provided a $270 million construction loan to All Year Management for its one-million-square-foot mixed-use project at the former Rheingold Brewery site in Bushwick.
In August, it provided a $300 million construction loan to Ceruzzi Properties for a 72-story mixed-use project at 138 East 50th Street, and in September it closed a $297 million loan for the construction of Fortis Property Group’s River Park, a three-building mixed-use development at the former site of the Long Island College Hospital medical campus in Cobble Hill.
MRC was also busy providing much smaller loans, too. For example, a $31.5 million loan for 744 Bedford Avenue in Williamsburg.
“We’re able to service small deals as well as very large deals all within our own balance sheet, which is a huge advantage,” Zegen said. “We’re providing customization and certainty of execution.”
With its 13-year history, MRC is one of the more seasoned of the now-many alternative lenders in the market. And that experience goes a long way.
“On value-add transactions it’s hard to have a partner who doesn’t know what they’re doing,” said Zegen. “People want a smart lender who’s nimble, can service its loans and can act on the fly when needed. That’s what we’ve been able to produce for our borrowers, and what makes us unique.”
The company kept busy on the equity side, too. In July 2017, MRC partnered with Artemis Real Estate Partners to acquire two adjacent industrial properties at 184-10 and 184-60 Jamaica Avenue in Queens for $78 million. The plan is to reposition and upgrade the buildings.
“We really like the industrial sector,” Zegen said. “We saw a major opportunity there earlier than most, because we were lending on projects and, as an owner, we were converting industrial to office.
“We realized that we were pushing out industrial tenants, but there was such a lack of industrial space out there for them to move to as more and more has been taken out of the system,” he added.
Most recently, MRC filed plans to build a two-tower residential project at 69-02 Queens Boulevard. If approved, the half-million-square-foot, 561-unit project will be one of the largest new residential developments to come to Woodside in decades.
And while MRC may be one of the most active real estate investment firms in the Big Apple, it’s also about to go bi-coastal and open a Los Angeles office where there’s “a real need for our kind of capital,” Zegen said.
Madison Realty Capital is located 825 Third Avenue, 37th Floor, New York, NY 10022. Learn more at madisonrealtycapital.com.