Northwind Group Closes $208 Million Construction Loan for Capstone Equities and BH3 Management's Office-to-Residential Conversion at 141 Willoughby Street in Downtown Brooklyn

Northwind Group has originated a $208 million first-mortgage construction loan for the office-to-residential conversion of 141 Willoughby Street, a 24-story, 355,000-square-foot Class A tower in Downtown Brooklyn, the Manhattan-based real estate private equity firm and debt fund manager announced Sept. 11.

The financing supports a joint venture between Capstone Equities and BH3 Fund Advisors, which took control of the property in 2025 after acquiring the distressed debt and credit-bidding its position to take title. Loan proceeds retired existing debt on the property and will fund the partial conversion into 239 rental apartments across floors 8 through 23, as well as the commercial lease-up of floors 1 through 7, which has been rebranded as 385 Gold. The financing was arranged by Rob Turner and Ethan Pond of Eastdil Secured Savills.

A Never-Occupied Tower Positioned for Conversion

Originally delivered in 2023 to full Class A institutional specification, 141 Willoughby Street was never occupied, a circumstance the sponsor joint venture has characterized as a structural advantage. The absence of existing tenants eliminates the buyout costs and deferred maintenance that typically complicate office-to-residential projects, allowing the conversion scope to remain largely interior.

The building's physical configuration further supports the conversion thesis. Its side-core layout features nearly column-free floorplates approximately 30 feet deep, wrapped in four-sided floor-to-ceiling glazing. Slab-to-slab heights of 15 to 17 feet will produce finished ceiling heights that exceed what conventional new multifamily construction typically delivers.

The residential program will span floors 8 through 23, yielding 239 rental apartments. The commercial component on floors 1 through 7 will operate under the 385 Gold brand with separate entrances and a dedicated elevator bank, with no shared circulation between residential and commercial tenants. Amenities across the cellar and second floor will include a fitness center, entertainment lounge, co-working space, wellness center, golf simulator, sports court, games room, and children's playroom, along with landscaped terraces on the 10th and 20th floors and a full-time attended lobby.

Fogarty Finger, the original design architect for the tower, has been re-engaged as executive architect for the residential conversion. The construction manager engaged for the project has converted more than 43 commercial buildings totaling over 14 million square feet into more than 14,500 apartments since 1997. Newmark has been retained to market the commercial space.

Sponsor Joint Venture: Capstone Equities and BH3 Fund Advisors

The sponsoring joint venture pairs Capstone Equities, a New York City-based real estate private equity and investment firm, with BH3 Fund Advisors, the investment advisory affiliate of BH3 Management.

Capstone Equities is owned and managed by Joshua Zamir and Avi Kollenscher, and specializes in opportunistic property acquisitions, distressed assets, and non-performing loans across major domestic U.S. markets and Europe. The firm has executed over $2 billion of transactions spanning more than 5 million square feet of office, more than 3,000 hotel keys, and more than 300,000 square feet of industrial warehouses since inception, with a particular focus on non-performing loans in the U.S. and Western Europe.

"The opportunity to reimagine a building the caliber of 141 Willoughby into a thriving mixed-use asset represents a truly unique opportunity in the market today," said Avi Kollenscher, Partner at Capstone Equities. "We believe this asset will deliver the highest quality residential and commercial product available in the market and we are excited to deliver into a quickly evolving and growing Downtown Brooklyn community. We are thrilled to partner with our friends at Northwind on this transaction."

BH3 Fund Advisors was launched in 2018 as the investment advisory affiliate of BH3 Management, a real estate investment and development firm founded in 2009. Together, the entities operate a vertically integrated real estate investment, operations, and development firm led by co-founders Daniel Lebensohn and Gregory Freedman, and Executive Chairman Eric Edidin, with offices in South Florida, New York City, and Denver.

Adam Falk of BH3 Fund Advisors, speaking on behalf of the joint venture, said the building's institutional design characteristics translate directly to the residential program. "141 Willoughby is an exceptional asset in a market where demand for high-quality apartments is strong," Falk said. "The building was designed to an institutional standard, with ceiling heights, natural light, floor plates, and amenities that will translate extremely well to residential use. The commercial component is incredible in its quality and efficiency. With the NYC office market having materially recovered, 385 Gold is seeing significant demand from large users native to Brooklyn as well as Manhattan tenants dealing with escalating occupancy costs for Class A space."

Northwind's Debt Fund Strategy and Lender Perspective

The loan was originated through Northwind Group's discretionary debt fund platform as part of the firm's ongoing strategy of providing financing for well-located, institutional-quality office-to-residential conversions across New York City and other supply-constrained markets. Founded in 2008 by Ran Eliasaf, Northwind has executed over $11 billion in real estate transactions across more than 400 properties in 28 states.

"141 Willoughby Street is a rare conversion opportunity — a brand-new, institutionally built tower, which allows the Sponsor to execute a streamlined, largely interior scope of work without the tenancy and structural risks that typically accompany office-to-residential projects," said Ran Eliasaf, Founder and Managing Partner of Northwind Group. "Combined with Capstone and BH3's experience and a highly regarded project team, we are confident in the Sponsor's ability to deliver this conversion, and we are pleased to support them in the continued transformation of Downtown Brooklyn into one of the city's most dynamic residential submarkets."

Northwind was represented by John Vavas of Polsinelli Group. The sponsor was represented by Elizabeth Smith of Goldberg Weprin Finkel Goldstein LLP.

Downtown Brooklyn Market Context

141 Willoughby Street sits one block east of the Fulton Street retail corridor and two blocks from the MetroTech campus, with 13 subway lines accessible across three stations within approximately a six-minute walk. The location places the building within reach of Downtown Brooklyn's dense concentration of education, healthcare, and government tenants — the primary target audience for the 385 Gold commercial component.

The project is entering a Downtown Brooklyn multifamily market that has absorbed a record volume of new supply over the past several years. The forward delivery pipeline is set to decline materially, a dynamic the sponsor views as supportive of lease-up timing for the 239 residential units. Citywide, office-to-residential conversions have become a meaningful contributor to New York City's housing pipeline, with completed, ongoing, and potential conversion projects tracking across the five boroughs.

On the commercial side, Brooklyn's office market has seen net absorption turn positive in recent periods, aided in part by conversion-driven reductions in office inventory. The 385 Gold commercial component is positioned to compete for large tenants seeking alternatives to Manhattan's Class A market, with the building's separate entrance configuration and dedicated elevator bank designed to support institutional-grade commercial occupancy alongside the residential program above.