KKR supplies $95 million 10-year loan for Brooklyn apartments

KKR supplied a $95 million, 10-year fixed-rate loan to refinance 544 Carroll Street, a 133-unit apartment building in Brooklyn's Gowanus neighborhood, Commercial Observer reported. The borrowers are a joint venture of Avery Hall Investments, Bridge Investment Group and Declaration Partners.

The loan retires roughly $71.1 million of existing debt, according to JLL, which arranged the financing. The new debt is about $23.9 million larger than the balance being retired. The coupon and spread were not disclosed.

For allocators in Bridge funds, the loan fixes the building's cost of debt for 10 years, with first maturity in 2036. Bridge reports $49.3 billion in regulatory assets in its Form ADV, so the $95 million loan is small against the platform, but it is a current print on what a lender will underwrite for a newly completed, partly affordable New York building. The coupon is the piece allocators cannot yet price.

Of the 133 units, 98 are market-rate and 35 are affordable, and the ground floor holds 6,284 square feet of retail. The 17-story building, completed late last year, sits in a federally designated Opportunity Zone and includes a rooftop terrace, coworking space, a fitness center and a children's playroom.

CIBC's loan to SkyREM's industrial portfolio was structured on a three-year bank term, as this publication reported in September; KKR's is a decade fixed on a residential asset. This publication has argued that refinancing pressure is showing up as an equity and structure problem rather than a wave of forced sales.