Blackstone has provided a $365m bridge loan to Westbrook Partners and Atlas Capital Group for the purchase and redevelopment of the sprawling St. John’s Terminal building at 550 Washington Street on Manhattan’s far west side, Real Estate Capital has learned.
The loan — made out of Blackstone Real Estate Debt Strategies’ (BREDS) second fund, BREDS II — allows Westbrook to take majority control of the 1.3m sq ft office property and move forward with plans for its redevelopment.
Westbrook and Fortress, along with Atlas, which retains a small minority stake, had paid aging real estate tycoon Eugene Grant $250m for his controlling 50.1 percent stake back in January of 2013.
Blackstone, among the few lenders able to make loans of the size, was attracted to the property due to its location in the growing Hudson Square area, on the Hudson River waterfront, as well as the transitional asset’s potential to attract high-quality office tenants, sources said. Blackstone declined to comment.
The property, nestled between SoHo and the Meatpacking District, sprawls more than three city blocks and stretches more than 800 feet along the West Side Highway. Its 1.3m sq ft are spread between just four floors, which, at 250,000 sq ft, are Manhattan’s largest and feature sprawling views of the Hudson River.
Once a waterfront shipping facility, Grant repositioned the building as a low cost office location in the 1980’s, geared towards financial firms that needed specialized facilities.
Among notable recent deals, in May the BREDS platform provided a $320m first mortgage loan to refinance Manhattan’s iconic Woolworth Building and an $83m acquisition loan to Highgate Hotels and The Meridian Group for the acquisition of the Hyatt Regency Hotel in Bethesda, Maryland.
In January the platform provided a $247.5m acquisition loan on 180 Maiden Lane, a 1.2m sq ft downtown Manhattan trophy tower that MHP Realty Services and Clarion Partners purchased for $470m.