Following the start of demolition earlier this summer, Kushner has secured $415 million construction financing for its overhaul of Monmouth Mall in Eatontown.

Fortress Investment Group and Rithm Capital Corp. will fund the work. The project will transform the property from an enclosed shopping mall to Monmouth Square, an open-air town center complete with retail anchor Whole Foods Market. Kushner announced the funds Sept. 3.

The financing comprises two loans:

• $303 million residential loan from Fortress-managed funds
  • Monmouth Square will add 1,000 housing units, including 125 designated as affordable housing
  • Funding came through affiliates of Fortress Investment Group
  • Under Kushner’s new Livana banner, the residential component will also include a 40,000-square-foot clubhouse, coworking spaces, pickleball courts, a children’s playroom and more.
• $112.5 million retail loan from Rithm Capital
  • Operating partner – GreenBarn Investment Group – will manage
  • With 990,000 square feet of retail and restaurant space due, the work will refresh retail options in Eatontown

Speaking during the project’s May groundbreaking ceremony, Chief Development Officer Michael Sommer discussed Kushner’s plans to “de-mall” the existing structure.

“Brick and mortar retail is not dead. Boring retail is dead,” Sommer said at the time. “And therefore our business plan contemplates a full de-malling of the existing space – essentially turning the common areas of the buildings inside out and bringing the property back to its original open air configuration.”

The work will reduce retail options at the site by 40%, according to Kushner. That includes razing both the former Lord & Taylor and JCPenney departments stores at the mall. Barnes & Noble will relocate to a new retail building at Monmouth Square so that Whole Foods can move into its current space.

An AMC movie theater, Macy’s and Boscov’s will remain at the property and stay open during construction.

Located less than 1 mile from Exit 105 of the Garden State Parkway, the redevelopment offers accessibility from its perch along Route 35 in Monmouth County.

According to Kushner, Monmouth Square’s retail component is already 82% preleased. BOND Retail Partners handles retail leasing for the property.

Minno + Wasko and Planners, Benoy and the Dietz Partnership lead architectural design for the project.

Ushering in a new era

Kushner CEO Laurent Morali said the New York real estate development and management firm was thrilled to obtain the financing.

“This important project represents a new era for this property and the region, where a thriving, multifaceted community hub will rise from an outdated, underused concept,” Morali commented. “Monmouth Square will not only provide premier living and shopping experiences but will also serve as a model for future mall redevelopments across the country.”

Marking the substantial progress at the site, Sommer spoke to the gravity of the effort.

“Redeveloping a property of this scale and scope is a complex endeavor, requiring a deep understanding of market dynamics along with strong relationships with financial institutions,” he said. “Securing construction financing represents a significant milestone in our efforts.”

Representatives from GreenBarn and Fortress both spoke to the potential of the project. GreenBarn Managing Partner David Schonbraun described it as a “next-generation model for retail redevelopment.” Meanwhile, Fortress Investment Group Managing Director Spencer Garfield said, “Monmouth Square provides a compelling opportunity for us to have a positive impact on the community for decades to come while seeking to deliver strong risk-adjusted returns for our investors.”

Kushner has been busy in New Jersey – and Monmouth County – this year. After its latest local start – breaking ground on Colts Neck’s first luxury apartment complex in July – the company now has more than 1,700 units underway in the region.