One Willoughby Square is getting a fresh shot of cash and a new leasing playbook. JEMB Realty has launched a recapitalization and refinancing of the 35-story office tower in Downtown Brooklyn in a push to fill its upper floors faster. The package brings in fresh equity, new partners and a reworked debt stack that is meant to give the 500,000-square-foot property more time and budget for finished suites and tenant marketing. Landlord executives say the changes, along with a recent run of retail and office deals, are aimed at repositioning the tower for creative, technology and professional firms.
JEMB’s recap includes a $125 million loan from Deutsche Bank and a joint-venture partnership with AVRS Partners and KSR Capital, the company said in its announcement. The developer has also rolled out a speculative prebuilt program with suites ranging from 2,000 to 10,000 square feet, slated to deliver in the second quarter of 2026. The relaunch pairs the new financing with an active leasing push, according to Connect CRE.
Deal terms and capital stack
Industry filings and reporting indicate that the sponsors contributed roughly $68.5 million of fresh equity to pay down prior loans and seed reserves, and that the refinancing included a $75 million A-note sold into the Benchmark 2026-V20 CMBS conduit. Rating agencies and trade reporting have flagged subordinate obligations, including EB-5 mezzanine exposure and about $65 million of convertible loans, as lingering risks in the layered structure. The financing also split the tower into two condominium units for lending purposes, leaving the upper tranche debt-free to aid leasing, as reported by The Real Deal.
Leases and prebuilt suites
To jump-start momentum, JEMB has already signed a pair of tenants. CorePower Yoga is set to open a 5,000-square-foot Brooklyn flagship at the base of the building, while Miami-based Rubenstein Law has expanded and relocated to roughly 10,000 square feet on an upper floor. CBRE’s Stephen Sjurset brokered the CorePower Yoga deal, and Rubenstein Law was represented by Jenna Catalon, Matt Cheezam and Scott Quick of Cushman & Wakefield. Morris Sabbagh, principal at KSR Capital, said the partnership reflects a shared belief in the building’s potential and argued that the new capital and leasing strategy position the property for success, per New York Real Estate Journal.
Market context for Downtown Brooklyn
Even with the relaunch, Downtown Brooklyn’s office market is still under pressure. Vacancy hovered near 21.1 percent in the third quarter, and the tower itself is roughly half leased, according to market trackers. The lower portion of the building, which carries the Deutsche Bank debt, is mostly occupied and anchored by an approximately 86,000-square-foot lease to Albee Square Montessori, while the upper floors are being marketed as move-in-ready spec suites. Those dynamics make the relaunch a bet on momentum rather than a sure thing, according to Bisnow.
“One Willoughby Square is now fully capitalized, refinanced, and has a strong team in place,” JEMB’s Morris Jerome said, framing the moves as a relaunch intended to speed up leasing timelines. Brokers say the next few quarters will reveal whether the spec suites and new retail energy can change the building’s leasing trajectory in a still-cool office market, as reported by Bisnow.
What comes next is whether mid-sized creative and tech tenants take the prebuilt options quickly enough to justify the equity infusion, and whether the layered financing holds up if leasing stalls. Rating firms have already flagged the subordinate EB-5 and convertible loans as stress points, meaning the outcome will hinge on both market pickup and the owner’s capital strategy, per The Real Deal.
