The Monologue
In June 2020, as New York's economy was effectively shut down, a $28.62 million mortgage was recorded against 1389 Broadway in Brooklyn. Two months later, that debt was retired and replaced with two separate Citibank instruments — $28.62 million dissolved into a $4.61 million and a $4.49 million note filed the same day in August 2020. The combined takeout totaled roughly $9.1 million. The gap between the construction loan and the permanent financing is the story here.
This piece argues that 1389 Broadway, a 115-unit, seven-story elevator apartment building completed in 2020, carries a capital structure that almost certainly relied on substantial equity injection at certificate of occupancy — or a subordinate debt layer that does not appear in public records. In a market where Brooklyn multifamily valuations have compressed and refinancing costs have risen sharply, understanding how that equity was deployed, and at what basis, is the central question for any buyer, lender, or operator approaching this asset in 2025.
The Architecture of 1389 Broadway
The building at 1389 Broadway in Brooklyn's Bushwick-adjacent corridor is a 2020-vintage, seven-story elevator multifamily structure containing 115 residential units across 119,315 square feet of gross area — a tight 1,037 square feet per unit on average, consistent with purpose-built rental construction targeting one- and two-bedroom renters rather than luxury owner-occupants. The major alteration permit was filed in 2019, meaning the development cycle ran squarely through New York's worst construction financing environment in a decade. The lot is 23,450 square feet, and the built FAR lands at 5.09. That density reflects a developer who maximized yield on a standard Brooklyn lot, leaving little room for amenity buildout that would command a material rent premium.
New construction in this cycle and at this scale tends to use steel or concrete frame construction with a curtain wall or brick-veneer exterior. Whatever the facade treatment, the absence of landmarked or contextual overlay zoning in this corridor means the building was designed entirely around the pro forma, not the streetscape. That is not a criticism of the architecture — it is a financial fact. Buildings optimized for unit count rather than differentiated design tend to compete on price in soft rental markets, not on product quality. In a softening Brooklyn submarket, that positioning matters. The operator does not have an amenity moat or a material product advantage to defend rent.
The Capital Stack: Brooklyn Elevator Markets, 2025–2026
City records show three mortgage filings against 1389 Broadway within a three-month window in 2020. The first, recorded in June 2020, was a $28.62 million instrument — almost certainly a construction loan or construction-to-permanent bridge facility being paid off at or near completion. Then in August 2020, two Citibank mortgages were recorded simultaneously: one for $4.61 million and one for $4.49 million, totaling approximately $9.1 million. The recorded owner, 1389 Bbb, L.P., acquired the property via deed in March 2018 at a recorded consideration of zero dollars — a structure typically associated with an internal transfer, a partnership contribution, or a land acquisition rolled into a broader corporate reorganization. No arm's-length land sale price is publicly available.
The arithmetic here demands attention. A $28.62 million construction loan retired with $9.1 million in permanent bank debt implies one of three things: the project was substantially paid down with equity at stabilization, there is a preferred equity or mezzanine layer sitting between the senior debt and the LP, or the asset achieved a cash-out refinancing that is not captured in the available record set. At a 5.5% cap rate applied to a stabilized 115-unit Brooklyn building of this vintage — a generous assumption in the current environment — the asset would need to generate roughly $8 million in net operating income to support even a $145 million valuation. That is implausible for a building of this size and location. A more realistic valuation range of $30 million to $45 million would suggest the Citibank debt is conservatively sized, which either means the equity basis is deeply embedded or the sponsors are holding a low-leverage position by design. Either way, the refinancing clock is running. August 2020 bank debt on a five-year term matures this year.
The Light Tower Thesis
The conventional read on 1389 Broadway is that it is a stabilized, low-leverage Brooklyn multifamily asset — new construction, institutional bank debt, no obvious distress signal. That reading stops at the surface. The $19.5 million spread between the June 2020 construction financing and the August 2020 takeout is unaccounted for in public records, and that is exactly where the real capital story lives. If the sponsors injected equity to close that gap, they are sitting on a basis that may or may not pencil at today's cap rates. If subordinate debt exists off-record, a sale or refinance surfaces a capital stack complication that will affect both pricing and lender appetite. August 2020 Citibank paper maturing now means this building is either already in refinancing discussions or will be shortly — and the rate environment makes any new senior debt meaningfully more expensive than the debt it replaces.
A buyer or lender approaching this asset without a full accounting of the equity structure, the actual basis, and the current rent roll is underwriting a position, not an asset. The right move here is to pull every subordinate agreement, reconstruct the LP economics, and stress-test the current NOI against a realistic refinancing coupon before any LOI conversation begins. That work determines whether 1389 Broadway is a clean acquisition opportunity or a recapitalization waiting to be negotiated — and getting that distinction right before the process starts is where capital advisory earns its place at the table.