Wells Fargo Bank has provided, with M&T Bank and J.P. Morgan Chase as co-lenders, a $200m construction-to-perm financing facility for the development of a residential complex on Manhattan’s far west side at 525 West 52nd Street.
The facility to an affiliate of Taconic Investment Partners and partner Mitsui Fudosan Americas backs their development of two luxury towers — 14 and 22 stories — that will rise from a single-story base with a common lobby and ground floor retail.
The building will contain approximately 445,000 sq ft and 392 residential rental units, 80 of which will be designated as “affordable” based on The New York State Housing Finance Agency’s (HFA) guidelines.
The financing consists of $10m of 2015 Series A low floater tax-exempt bonds; $60m of 2015 Series B taxable bonds; $55.5m of 2016 Series A low-floater tax-exempt bonds; and $74.5m of 2016 Series B low-floater taxable bonds. The facility includes an extension option with an earn-out feature to allow the partners to resize the loan and return a portion of the initial equity upon stabilization of the project.
Greystone Bassuk, which arranged the financing, called it the largest construction financing ever structured entirely as a private placement under HFA’s 80/20 Housing Program, which requires a 20% affordable component.
The financing process “continued for more than 16 months and involved several unanticipated challenges, such as the replacement of our equity partner,” said Chris Balestra, senior vice president of Taconic.
The project is located on a through-block site extending from 52nd Street to 53rd Street between 10th Avenue and 11th Avenues.