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BP, Rudin Close on $250M Round of Construction Financing for Dock 72 in Brooklyn Navy Yard

Construction Moving Forward on 675,000-SF Innovation and Tech Hub Anchored and Co-Managed by WeWork
January 24, 2017
A joint venture between affiliates of real estate investment trust Boston Properties, Inc. (NYSE: BXP) and family-owned Rudin Development has closed on a $250 million construction loan for its Dock 72 innovation and tech hub set to rise at the Brooklyn Navy Yard.

The financing was led by J.P. Morgan, M&T Bank and U.S. Bank. Terms of the loan transaction were not disclosed.

With Dock 72, the joint venture is undertaking one of the largest New York City commercial buildings to be constructed outside of Manhattan in decades. In addition, the two prolific commercial real estate players are marking their respective forays into the Brooklyn market. Designed by S9 Architecture, with the lobby, common areas and amenities designed by Fogarty Finger Architecture, the building celebrates the surrounding maritime and industrial history of the Navy Yard and is designed to drive innovation and collaboration between tenants.

"The Boston Properties/Rudin team is excited to close this transaction with JP Morgan, M&T Bank and U.S. Bank to move forward with creating this dynamic, unique project, which will be the office building of the future," said Michael Rudin, partner in Rudin Development. "Co-working space is an integral part of New York’s new economy, transforming the way people do business. With the development of Dock 72, we are building the infrastructure to meet that growing demand."

WeWork will anchor the new building with a 222,000 square-foot lease in addition to acting as co-developer and curator of the amenity spaces, which will include a health and wellness center, specialty food and beverage offerings and a rooftop conference center.

  Related News  Rudin, BP Back First Ground-Up WeWork Office Sharing Bldg

The 16-story, 675,000-square-foot, 4-Star asset is expected to be ready for tenant fit-out in late 2017, with an anticipated completion date in early 2018. Upon completion, the building will feature floor plates ranging from 40,000 to 60,000 square feet, offering contiguous and easily devisable blocks of space for a variety of tenant sizes. The developers are seeking LEED certification for the project, which will feature numerous design, technology, sustainability and resiliency features.

Dock 72 is centrally located within the Navy Yard on a 60,000-square-foot strip of land jutting out into Wallabout Bay in the East River, between two active dry-docks.

"Representing an investment of nearly $400 million, Dock 72 is already having a strong impact on the area’s economy, putting hundreds of people to work in what will be a truly iconic addition to the Brooklyn Navy Yard. In the long term, the building’s tenants will bring thousands of good-paying jobs to the Yard, significantly contributing to the Yard’s largest expansion in 50 years," said Brooklyn Navy Yard Development Corporation President and CEO David Ehrenberg. "Achieving this important milestone affirms the private sector’s confidence in both Dock 72 and in the Yard itself."

The construction financing for Dock 72 follows a blockbuster year for commercial activity at the Navy Yard. At the 1 million-square-foot Building 77 currently undergoing a $185 million renovation by the Brooklyn Navy Yard Development Corporation, Russ & Daughters signed a lease to anchor the new public food hall and manufacturing space at the property, while tech incubator and seed fund 1776 will take the top floor. Meanwhile B. Amsterdam, Europe’s largest business incubator, signed a long-term, 100,000 square-foot lease at Building 127, and Mast Brothers Chocolate leased 65,000 square feet at the Yard’s Green Manufacturing Center, which also counts co-working space provider New Lab as an anchor tenant.
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