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A New York-based developer has turned to a venerable local funding resource to close a gap in its construction budget for one of downtown Pittsburgh's biggest residential conversion projects.
In one of its first big investments under a new partnership with the Regional Industrial Development Corporation of Southwestern Pennsylvania, Strategic Investment Fund Partners announced it is providing $6 million in financing to Victrix LLC to help the New York firm move forward with redeveloping 300 Sixth Ave.
It's a Daniel Burnham-designed former department store building that GNC Corp. vacated last year for a new headquarters in the Strip District, motivating Victrix to buy the building for a 253-unit apartment conversion.
In a prepared statement, Victrix partners Anoop Dave and Tim Gordon expressed gratitude toward a Strategic Investment Fund they called an "innovative and cutting-edge program."
The announcement of the new funding comes after the project has already started construction, with significant interior demolition and framing underway, according to a source familiar with the project.
The total budget was not provided in the announcement, and Anoop Dave didn't immediately respond to request for comment or further detail.
The loan is expected to be the last financing needed to move forward toward completion on a project also to include 13,000 square feet of retail space and 34 parking spaces inside the building.
According to the announcement, the $6 million loan will be fixed at 6.5% for a six-year term, with interest-only payments for the first 36 months at a time when construction loans can come with 7% or 8% interest rates.
The new funding for Victrix comes as the project is marketed on social media through an investment platform called RealtyMogul, seeking equity investment in the project.
Strategic Investment Fund Board Chair David J. Malone, who also serves as chairman and CEO of Gateway Financial Group, said of the investment: “This is exactly the type of financing the Strategic Investment Fund exists for, aligned with our Regional Cores Investment Strategy. The conversion of this commercial property to residential will bring more people to downtown, help to catalyze investments in retail, restaurants and other amenities essential to support the growing downtown neighborhood, and will provide a valuable roadmap for future projects, not only in downtown Pittsburgh, but in downtowns and main streets across the fund’s 12-county footprint.”
The investment comes with RIDC's new role with the Strategic Investment Fund, which was originated by the Allegheny Conference on Community Development in 1996. In its history, the fund has supported 67 projects with $171.2 million in financing, according to the announcement.
Long a supporter of projects in and around downtown, the Strategic Investment Fund also has recently provided financing to the City's Edge affordable housing project in Uptown, the Helm apartments in the Strip District and the projects of Astrobotic Technology Inc. on the North Side.