BLDG to Build ‘For All’ in Manhattan
- Jul 20, 2015
A $254 million construction-to-permanent financing facility with Bank of China, New York Branch, on behalf of an affiliate of BLDG Management Co. Inc. has closed, it was announced Friday by Greystone Bassuk, of New York, which arranged the financing. The funding package is for the construction of a 43-story mixed-income multi-family building at 222 E. 44th St. in Manhattan.
The project will take up a full block from 43rd Street to 44th Street and from 2nd Avenue to 3rd Avenue in what Greystone Bassuk calls an “underserved residential submarket of Midtown East.”
The 441,000-gross-square-foot building will have 429 residential units, of which 87 will be designated as affordable housing units and the remaining 342 will be leased at market rents. Ground-floor retail and a multi-level parking garage will round out the project.
The credit facility, according to GB, was structured as a letter of credit providing credit enhancement to support tax-exempt and taxable variable-rate bonds issued under the New York State Housing Finance Agency’s 80/20 Housing Program. It comprises:
- $26 million of 2015 Series A tax-exempt bonds,
- $23.3 million of 2016 Series A tax-exempt bonds,
- $125 million of 2016 Series B taxable bonds, and
- $76.9 million of 2017 Series A taxable bonds.
The marketing of the transaction was led by GB executive vp Drew Fletcher, with support from director Matthew Klauer and vice president Evelyn Savino.
The site was previously occupied by an office building, according to Greystone Bassuk CEO Richard Bassuk.
The apartments reportedly will feature “condominium quality” finishes, and the building will offer such amenities as concierge and valet service, a penthouse roof deck and lounge, a sun deck and BBQ area, indoor swimming pool, resident lounge, golf simulator, children’s playroom; fitness center with an indoor basketball court; and bike and tenant storage.
BLDG president Lloyd Goldman noted that this is the developer’s first “80/20” project.
The financing package includes several features that are not typical of 80/20 deals, according to GB. First, Fletcher told Commercial Property Executive, it was structured as a fully underwritten commitment for the entire 10-year facility providing both construction and permanent financing in a single loan with one closing. Further, the commitment for the entire facility (structured as an initial four-year term, plus a six-year extension option) is on a fully “non-recourse” basis.
That “non-recourse” aspect, Fletcher noted, was “highly attractive” to BLDG and also unusual, in that most construction lenders currently require a minimum of 15 percent to 25 percent recourse.
In addition, he said, Bank of China fully assumed any syndication risk to the extent they should ever decide to sell down their position. Finally, the structure also included a flexible earn-out feature to allow the partners to resize the loan and return a portion of the initial equity on stabilization of the project.