Slate Property Group, which in March originated a roughly $60 million loan to reignite a stalled multifamily development in Queens, is seeing a growing need for construction completion financing.

The New York-based manager, which invests throughout the capital stack, is seeing the niche emerge due to the well-documented absence of regional and national bank lenders – typically key sources of construction debt – throughout the US, says Daniel Ridloff, managing director.

“We are seeing a lot of this due to illiquidity in the traditional financing sources,” Ridloff says. “It has provided a different type of opportunity, stepping into these construction situations that we call completion opportunities. A lot of the construction risk [is] in the rearview mirror and it starts to feel a lot more like a completion-bridge loan as opposed to ground-up construction finance.”

The firm has originated a number of these deals, including a $60.25 million bridge financing alongside partner and New York-based manager LibreMax Capital to fund the initial stages of construction for a condominium development in the Astoria neighborhood of Queens, New York.

The two-year, floating loan was originated on behalf of Manhasset, New York-based developer Ming’s Garden Realty for the final rounds of construction and sellout of the 13-story, 143-unit property at 26-01 4th Street in Queens. The financing was deployed mid-construction, setting the project for estimated completion in the first quarter of 2025.

Kurt Latchman, vice-president at Slate, says the firm is planning to stay active in the market with a focus on such multifamily construction and bridge loans. Between February and the final weeks of March, Slate had a pipeline of $300 million expected to close.

Expansion in construction lending

Ridloff says Slate is bullish on more construction completion lending opportunities similar to the 26-01 4th Street project. He notes despite the deep bench of active participants in the bridge and construction lending spaces, there is a lapse in debt providers able to span the two types of financing. “There is a nuance there, where it is not as competitive but you get the benefits of both worlds,” he says.

Ridloff says having an equity component to Slate’s business to help with credit opportunities serves as a knowledge and expertise boost. “It really allows us to differentiate ourselves to take on these types of opportunities where it can help developers. It is a space that we are super active in and hoping to do more,” he adds.

The February financing was not Slate’s first foray into these construction completion opportunities. In October last year, the firm originated a $142 million loan through its debt financing arm, SCALE Lending, to fund the final phases of a separate Queens multifamily project.

At that time, Slate co-founder and principal Martin Nussbaum told Real Estate Capital USA he expected further tightening as bank balance sheets continued to be secured and payoffs slowed because of increased financing costs. Nearly two quarters later, that expectation is holding true.