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Joy Construction, Madd Equities Secure $86M in Construction Funding for 330 E 62nd Street

Memorial Sloan Kettering to Occupy Entire 90,000-SF Building
March 8, 2018
New-York based development firms Joy Construction and Madd Equities can finally move forward on the planned Midtown East medical office project, after obtaining $86.25 million in construction funding from Natixis.

Under a joint venture dubbed YYY 62nd Street LLC, the firms will build a 90,000-square-foot, seven-story office building at 330 E. 62nd St. in New York City that was described in early releases as a community center. It will deliver February 2019.

Memorial Sloan Kettering Hospital for Cancer and Allied Disease will occupy the entirety of the development, CoStar News can confirm. Public records show the Hospital signed a lease amendment on February 27.

Progress Capital’s Kathy Anderson and Brad Domenico negotiated the financing on behalf of the borrowers. The Natixis loan package is structured as a 24-month, interest-only construction loan. It comes with two extensions, of one year each, that will float over LIBOR. It carries a 90% loan-to-project cost and a flexible prepayment option, which was a "major consideration" for Joy and Madd Equities in choosing a lender partner, according to Progress Capital.

Natixis was represented during closing by Ralph Arpajian, Daniel Lisk and Jeremy Chubak of law firm Haynes Boone LLP.

A Kasowitz Benson and Torres LLP team comprising Douglas Heitner, Abe Seaman-Baldaro and Isaac Stern advised the borrowers.

The endeavor has been years in the works. On-site, the vacant property and 0.79-acre lot therein had belonged to the Roman Catholic Church, which sold it to YYY 62nd Street LLC in February 2014 for $21 million, according to CoStar data. The six-story, 37,000-square-foot building was since razed in 2015.
See CoStar COMPS #2965676.

The project is interesting for its institutional medical tenant. Sources speaking on the condition of anonymity tell CoStar News that these types of tenants are increasingly filling in the blanks on sluggish space.

Across New York City retail, for instance, a larger trend is brewing - the "reimagining" of ground-floor and above-grade retail space. Developers are looking to institutional retail tenants as "regular retail leasing is on the decline," sources say. Included in this bucket are medical tenants, which can take the whole building and make use of the ground floor.



Diana Bell, New York City Market Reporter  CoStar Group   
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