The Real Deal New York

Shvo, Witkoff look to get $800M in EB-5 funding

Asian investors to finance 125 Greenwich, 1 Park Lane

July 10, 2015 10:30AM
By Konrad Putzier

Rendering of 1 Park Lane (credit: Witkoff via New York Yimby) (inset, from left: Nicholas Mastroianni, Steven Witkoff, Michael Shvo)

Rendering of 1 Park Lane (credit: Witkoff via New York Yimby) (inset, from left: Nicholas Mastroianni, Steven Witkoff, Michael Shvo)

New York’s luxury condo developers are getting a fresh dose of Chinese cash, courtesy of the EB-5 program.

The U.S. Immigration Fund, which helps arrange financing through the popular visa program, is raising a total of $800 million in mezzanine financing for four major construction projects: Michael Shvo’s, Bizzi + Partners and Howard Lorber’s 125 Greenwich Street as well as Witkoff’s 111 Murray Street, Marriott Edition Hotel Times Square and 1 Park Lane. Two of the deals – 125 Greenwich and Times Square Edition – have closed, while the fund is currently raising capital for the two others, U.S. Immigration Fund president Nicholas Mastroianni told The Real Deal.

The fundraising highlights the growing importance of Asian capital in financing major construction projects in Manhattan. A prime example is 125 Greenwich, for which Mastroianni just began raising $175 million through the EB-5 program. Last year, Howard Michaels’ Carlton Group arranged $240 million in equity and debt financing for the condo project, with the bulk coming from an Asian lender group led by Singapore’s United Overseas Bank. The deal also included a $40 million investment from Indian pharmaceutical tycoon Dilip Shanghvi. If the U.S. Immigration Fund manages to raise the planned $175 million, the bulk of the 77-story Financial District condo project will be bankrolled by Asian capital.

And 111 Murray in nearby Tribeca, developed by Fisher Bros., Witkoff and Howard Lorber, is also getting a fat chunk of cash from the far east. Mastroianni said he has raised $175 million in mezzanine funding for the project through the EB-5 program. This comes on top of the $229 million in equity Chinese investment firm Taiping Asset Management pumped into the project. In total, the planned 58-story condo tower is getting more than $400 million in Chinese capital.

Mastroianni also said he has raised $200 million for Witkoff’s Marriott Edition Hotel Times Square at 701 Seventh Avenue, and is raisiing another $220 million for Witkoff’s 1 Park Lane, the planned 1,210-foot-tall condo tower at 36 Central Park South on the site of the Helmsley Park Lane Hotel.

Witkoff declined to comment. SHVO and Fisher Brothers did not respond to requests for comment on short notice.

The EB-5 deals are part of a wave of foreign capital funding New York’s luxury condo boom. As The Real Deal reported in May, many of the tallest condo projects are being financed primarily by overseas firms. The Bank of China, for example, lent Vornado more than $1 billion for its condo project at 220 Central Park South.