Developer Receives $12M for Condo Conversion

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NEW YORK CITY-A developer plans to convert a former church property in Greenwich Village into an eight-unit residential condominium development. The development plan involves maintaining the existing landmarked exterior while performing interior construction involving the addition of five floors.

Bethesda, MD-based CapitalSource Finance LLC provided a $12-million acquisition and construction loan for the conversion of the former Washington Square United Methodist Church. The loan will fund the acquisition, pre-development costs and the construction hard costs associated with the conversion. The ground floor will consist of two garden apartments with outdoor patios and the fourth and fifth floors will contain two penthouse duplexes with terraces.

“Renovations and conversions of historically unique, ‘non-traditional’ assets have been gaining the attention of developers and have proven acceptance in the market,” said Chris Kelly, CapitalSource managing director and head of real estate, citing St. Anne’s Church in Brooklyn and the Pythian Temple on West 70th Street as examples of this trend. George Kruse, investment officer in CapitalSource’s Structured Finance Business division, adds that the nature of the market today is that most any building is a candidate for condominium conversion. “However, church projects are not as obviously attractive as an existing office building or multifamily development. People don’t recognize them as a target. Because of this smaller market, churches have a much more favorable acquisition price.” Kruse says an added bonus is that churches are generally built very sturdy, with a sound structure and foundation and because churches are open and cavernous they are not too complicated to convert.

Kruse notes that one factor that made this property a “particularly good investment” was its location. The church is not even 100 feet to Washington Square Park and NYU is nearby. Construction will start as soon as permits and zoning permissions are received. The project should take nine to 12 months complete, so the units will go on sale at the beginning of next summer. The Structured Finance Business of CapitalSource Finance LLC specializes in providing innovative debt facilities to companies active in the real estate and finance industries.