Thorofare Capital has acquired a $16,500,000 senior participation investment of a $21,500,000 whole loan secured by 78 Walker Street in New York.

The loan will be used to fund the purchase of the eight-story, 1915-built building along with re-development and lease-up of a new 30,540-square-foot self-storage facility that will be operated by Public Storage. Public Storage is the nation’s largest public self-storage real estate investment trust that operates 3,310 facilities globally. The project is slated for completion in early 2025.

The floating-rate, interest-only whole loan carries an initial term of 24 months with an by-right extension option subject to business plan milestones. Thorofare participated in a $16.5 million senior position with a co-lender who acquired a $5 million junior participation of the $21.5 million.

The hard cost budget contemplates a full gut renovation of the building interiors including demolition, electric, lighting, plumbing, sprinkler system, elevator installations, storage units, fire life safety repairs and painting. Once completed, the climate-controlled facility will be well-positioned to capitalize on the dearth of self-storage space in the immediate trade area. Dense population demographics and limited competition provide favorable supply and demand fundamentals. At the time of loan closing, the trade area was undersupplied 252,538 SF in a 0.5-mile radius, 941,634 SF in a 1-mile radius and 2,059,948 SF in a 1.5-mile radius. Given the high barriers to entry, 78 Walker aims to generate customers from Tribeca, Soho, Nolita, Chinatown, East Village and Downtown Manhattan.

The sponsor is a privately-held commercial real estate developer, owner and manager.