PHOENIX, ARIZONA (February 1, 2023) – Northmarq’s Debt and Equity team of Brad Burns, Brandon Harrington, Tyler Woodard, and Chris McCook secured $37.5 million in construction financing for the development of The Pike in Newington, Connecticut. The capital stack included a $25 million senior construction loan with a bank, and preferred equity in the amount of $12.5 million from a real estate private equity firm. The combined senior construction loan and preferred equity represents 85 percent loan-to-cost (LTC.) The ground-up multifamily project is being developed by Florida-based Smith & Henzy.
Located near the intersection of Pane and Maselli Road in Newington, the developer is planning to break ground on the 151-unit, multifamily property before year-end 2022. The project is designed to be energy efficient to Energy Star Multifamily New Construction Standards. Building amenities include large furnished lobbies/lounges at each building entrance, community room, fitness center and an outdoor recreation area with outdoor seating between the two proposed buildings. Apartments will offer high end finishes including nine-foot ceilings, open floor plans, large windows, in-unit laundry, open kitchens with high-end appliances and breakfast bar, and elevator access to all floors. The future project consists of approximately 65 one-bedroom, and 86 two-bedroom units across the two buildings. Ten percent of the units are designated as workforce/affordable housing and limited to rents at 80 percent AMI.
“In today’s turbulent capital markets, our team was able to secure the entire capital stack for Smith & Henzy up to 85 percent LTC for this development,” said Burns. “The borrower’s development expertise and experience were important factors in us bringing this deal across the finish line with the lenders and allowed for a smooth closing.”
According to CoStar, the Connecticut multifamily submarket of Newington/New Britain/Wethersfield has remained stable throughout 2022, with an overall vacancy rate of 1.8 percent, far below the historical average of 4.4 percent. With no new construction in the submarket over the past 12 months, rents have increased 5.4 percent year-over-year, which is significantly exceeds the average annual growth rate of 2.9 percent over the past decade.