New Capital for Condo Development

Many traditional banks now hesitate to lend money for new development. But new sources of capital are emerging.

“For good, well-underwritten projects with capable and proven developers, there is still capital,” says Michael Schneider, principal and chief operating officer for Aristone Capital — which recently used capital from an unusual source to make a predevelopment loan for a 40-unit, eight-story condominium at 227-233 9th St. in Brooklyn’s Gowanus neighborhood. The loan will cover 67% of the cost of buying the site and other pre-development work.

Aristone could have provided the entire loan with its own credit facility. Instead, it used its online platform, Propellr.com, to offer accredited investors the chance to participate in the deal in a junior loan position. The opportunity was offered and closed in just two weeks.

That means Aristone was able to use less of its credit facility, and will have the ability to make more loans in the future.

You can hear more of Schneider’s perspective on New York City and the capital markets at Connect New York, which will be held Sept. 19, 2017, at The Underground, Rockefeller Center

For comments, questions or concerns, please contact Bendix Anderson