Kasowitz Lends a Hand on Billionaire’s Row
- Jul 02, 2015
Barbra Murray, Contributing Editor
JDS Development and Property Markets Group turned to law firm Kasowitz, Benson, Torres & Friedman L.L.P. to arrange financing for their luxury residential project in Midtown Manhattan, and Kasowitz’s transactional real estate team has come through–in a big way. Kasowitz just closed a $725 million financing deal for the partners’ construction of a 90-story skyscraper at 111 W. 57th St., the former home of the iconic Steinway Hall building.
It’s a billion-dollar development along Manhattan’s Billionaire’s Row. AIG Asset Management and Apollo Global Management provided the developers with the big bucks they need to bring 111 W. 57th to fruition. AIG supplied a first mortgage loan and Apollo delivered a mezzanine loan; both feature a four-year term and the option for a one-year extension.
Industry experts anticipate that the financing package will be one of the largest construction loans of 2015. AIG and Apollo had their reasons for parting with nearly a billion dollars for the development. “The lenders were likely attracted by the profile of the project, the continuing viability of the 57th Street corridor and the strength and construction expertise of the sponsor,” Douglas Heitner, a partner at Kasowitz and leader of the team that closed the loan, told Commercial Property Executive.
Talk about profile, 111 W. 57th has everyone’s attention. At 1,438 feet tall, it will transform the Manhattan skyline and hold the distinction of being one of the tallest residential towers in the Western Hemisphere. And since thin is always in, the building will stand out as the slimmest skyscraper in the world, featuring a width-to-height ratio of 1:23. Shop Architects is behind the design of the upscale condominium property, which will ultimately be a skillfully crafted combination of a new tower and the original, 247,000-square-foot, Warren & Wetmore-designed Steinway Building, which was originally built in 1925.
The lending community has expressed warm and fuzzy feelings for the 111 57th St. project in the past. In 2013 JDS and Property Markets were able to secure a $230 million loan from Annaly CRE L.L.C. for the acquisition of Steinway Hall from Steinway Musical Instruments Inc. and the recapitalization and consolidation of the neighboring parcel at 105-107 W. 57th St. In conjunction with the completion of the new financing deal, AIG and Partners repaid Annaly $230 million.
The new residences at 111 W. 57th, along with a bevy of other new developments, will answer an increasingly loud cry for über-upscale residential accommodations across Manhattan. “Already a densely built island, the borough of Manhattan has long been a story of limited supply when it comes to residential real estate. Combine that inherent scarcity with recently insatiable demand by ultra-wealthy buyers from all over the world, and you quickly understand how much of a seller’s market Manhattan has become—and why construction cranes and scaffolding have become ubiquitous in the city,” according to a spring 2015 report by Coldwell Banker.
Buyers aren’t being shy about shelling out a king’s ransom for high-end Manhattan condos, and developers are giving them what they want. The average selling price for a new-construction luxury condo has reached just over $2,310 per square-foot, marking a 66 percent increase over the last three years. Per the Coldwell Banker report, “High prices and pent-up demand are fueling a massive wave of new construction at the very high end that has so far succeeded in fetching ever-higher prices from an increasingly international group of buyers who are eager to invest in the perceived stability of New York real estate. They want big apartments, and they’re willing to pay handsomely for them.”
JDS and Property Markets expect to deliver 111 W. 57th in 2018.