NYC's Mercedes House Gets $229M in Financing
- Dec 16, 2011
December 16, 2011
By Barbra Murray, Contributing Editor
Thanks to Wells Fargo and JPMorgan Chase, Two Trees Management Co. now has a $229 million construction-financing package to commence the 850-unit second phase of the gargantuan Mercedes House luxury-apartment-and-condominium complex on Manhattan’s Far West Side.
Located atop a Mercedes-Benz car showroom, Mercedes House reached partial completion earlier this year, with leasing of the upscale residential building having commenced in May. Part two will yield an 850-unit glass tower, also designed by celebrated architect Enrique Norten, featuring both apartments and condos, which are being financed through two separate vehicles.
For starters, a $145 million construction loan is in place, courtesy of proceeds from bonds that were issued by the New York State Housing Finance Agency and credit-enhanced with a letter of credit by Wells Fargo. JPMorgan Chase played a role by backing 50 percent of the credit enhancement. Two Trees will utilize the funds to build 480 apartments, including approximately 100 residences that will be reserved for those qualifying for low-income housing. HFA’s bond issuance is nearly double that of the $77 million in financing the agency provided for the initial phase, which also encompassed market-rate and affordable housing.
The second phase of the financing for the second phase of Mercedes House consists of an $84 million construction loan provided by Wells Fargo and JPMorgan Chase for the development of 162 for-sale residences.
Morrison & Foerster LLP represented Wells Fargo and JPMorgan in the loan transaction. The law firm has been more than a little active in representing banks in real estate lending deals in Manhattan in 2011, including Bank of America in its role as lead lender for a $700 million construction loan for One57, a 90-story residential high-rise being developed by Extell Development in Midtown Manhattan. Unless a new deal comes to the fore within the next two weeks, the transaction will mark the largest single real estate construction-financing package in the country this year.