Office-to-residential projects have been hailed as an important next chapter in the future of development, and Manhattan’s largest real estate last month landed at one of the few, but closely-watched, projects.
Financing for the conversion at 25 Water Street is the largest yet in the U.S. and topped a less-than-stellar collection of debt deals across the borough. Along with a hotel in Times Square and a condo building in Greenwich Village, the five biggest loans totaled $767 million — well short of December’s $1.7 billion and $3.6 billion in January 2022. Here are more details.
FiDi convert | $415 million
Michael Dell’s MSD Partners and Apollo Commercial Real Estate Finance lent $415 million in senior debt — for a total of $536 million — to the developers at 25 Water Street, a 1 million-square-foot office building slated to become 1,300 apartments in the Financial District.
Jeff Gural’s GFP Real Estate, Nathan Berman’s Metro Loft and Rockwood Capital are developing the project, which landed the largest loan yet for an office-to-residential conversion in the U.S. The conversions underway in the city are largely concentrated in the Financial District, including One Wall Street, 70 Pine Street, 160 Water Street, and possibly 55 and 85 Broad Street.
Yo, tell | $130 million
MSD Partners refinanced the Yotel Times Square hotel at 450 West 42nd Street in Hell’s Kitchen with a $130 million loan, replacing Nashville-based AllianceBernstein as the lender. The hotel, where a Saturday night stay starts at about $250, spans 207,000 square feet and has about 700 rooms. Carlos Leal, CEO of Portuguese hospitality developer UIP, signed for the loan. The address is also home to Related Companies’ luxury rental building, Mima.
Village tillage | $105 million
G4 Capital Partners provided Madison Realty Capital with $105 million to build a 19-story condominium building at 14 Fifth Avenue in Greenwich Village. The funds include $76 million in construction loans with the remainder to refinance acquisition debt previously held by Connectone Bank. Construction of the building, which will have 20 apartments, was ordered to stop after the facade of a nearby building began to crumble. Madison Realty bought the land for the 82,300-square-foot project in 2015 for $27.5 million.
What’s cooking | $61 million
Popular Bank loaned $61 million for the purchase and renovation of a long-shuttered hotel at 130 East 39th Street in Murray Hill. The 199-key hotel, which sold for $50 million last month to an anonymous limited liability company, will undergo work to install kitchens in the rooms, according to plans submitted to the Department of Buildings that identify Yehuda Kohn as the owner. Malaysian real estate investor IGB Berhad had operated the hotel as part of its St. Giles chain until closing for renovations in 2018, Crain’s reported. The seller was Florida-based Colonnade Properties.
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Brazil to Canada | $56 million
Bank of Montreal refinanced two apartment buildings — 237 East 34th Street with 105 units in Murray Hill and 114 West 86th Street with 49 units on the Upper West Side — with a $55.75 million loan. Ownership is affiliated with Robert Gilardian’s Gilar Realty and Alex Forkosh’s Forkosh Development Group. The loan includes $21 million in new debt and replaces J. Safra Group’s Safra National Bank of New York as the lender.