The Real Deal New York

These were the biggest real estate loans of Q3 2016

Like any other transaction ranking right now, it’s dominated by Hudson Yards

November 11, 2016 11:20AM
By Will Parker

MTA CEO Thomas F Prendergrast with Hudson Yards 7 train and Sheldon Solow with Solow the Solow Building

Left to right: MTA CEO Thomas F. Prendergast and Hudson Yards 7 train, Sheldon Solow and the Solow Building

We’re really starting to see where the estimated $20 billion price tag for Hudson Yards comes from. The largest real estate loans that closed in the third quarter of 2016 contains more than $2.5 billion in Hudson Yards-related financing, including a bond issuance by the Metropolitan Transportation Authority and multiple construction loans for the Far West Side megaproject. The Real Deal analyzed lending transactions recorded by the New York City Department of Finance between July and September. See the top 10 loans of the quarter after the jump.

1) The other developer who gave his name to his building — $1.2 billion

Sheldon Solow is almost 90 years old, but he’s still got years of real estate debt service ahead of him. The Manhattan magnate in August closed on a $1.2 billion fixed-rate mortgage for his namesake Solow Building at 9 West 57th Street. JP Morgan Chase was the lender. According to Real Estate Weekly, Solow is expected to use a little over half of the funds to pay off existing debt with Deutsche Bank, but that would leave him a good chuck of change to play while he’s busy developing a previously long-delayed residential tower at 685 First Avenue.

2) MTA refills its MetroCard with major Hudson Yards bond issuance$1.06 billion

The MTA issued real estate-backed bonds for the first time ever in September, raising $1.06 billion from investors. The MTA said it would repay the bonds with revenue earned from land leased by Related Companies and Oxford Properties Group at Hudson Yards. Related will pay nearly $1.78 billion to the MTA just over the course of construction alone, the developer said in a report it commissioned. The MTA’s bonds were underwritten by Goldman Sachs.

3-4) The billions come in pieces at 35 and 10 Hudson Yards$695.5 million and $900 million

35 and 15 Hudson Yards

35 and 15 Hudson Yards

The funds needed to pay the MTA have to come from somewhere. Related Companies and partner Oxford Properties Group received a $695.5 million loan from the Children’s Investment Fund for 35 Hudson Yards, part of a total of $1.2 billion in financing on the property. The 1,000-foot-tall mixed-use skyscraper is expected to be complete by 2019. At 10 Hudson Yards, the same partners, along with with Allianz, closed a $900 million piece of another $1.2 billion in debt for the office building, this time from Deutsche Bank and Goldman Sachs.

5) German bank refis Time Square office tower$450.7 million
Dekabank Deutsche Girozentrale provided a $450.7 million loan to Edge Fund Advisors for 1540 Broadway, the office tower formerly known as the Bertelsmann Building. According to Commercial Real Estate Direct, the loan will be used to refinance an existing $350 million mortgage provided by Metropolitan Life Insurance in 2011.

6) That loan has the Abercrombie & Fitch look$400 million

Jeff Sutton’s Wharton Properties closed on a $400 million loan from JP Morgan Chase at 720 Fifth Avenue. The Plaza District retail condo is home to the Abercrombie & Fitch flagship store, which Sutton signed to a lease in 2004 (the lease expires in 2018). The 720 Fifth Avenue financing also included a mezzanine piece from SL Green, a co-owner of a number of Sutton’s properties including this one, in the amount of $33.75 million. A Fried Frank legal team provided counsel to Sutton on the transaction.

7) Hudson’s Bay re-ups Lord & Taylor loan, eh$400 million
In another Fifth Avenue retail detail, Hudson’s Bay Company took a $400 million mortgage from Canadian Imperial Bank of Commerce for the Lord & Taylor flagship property at 424 Fifth Avenue. The loan refinanced an existing loan of $250 million. At the time of the transaction, the property was appraised at $655 million, an estimate based on a triple net lease paid by Lord & Taylor, according to Business Wire. Hudson’s Bay is the parent company of both Lord and Taylor and Sak’s Fifth Avenue, following Hudson Bay’s 2013 acquisition of Saks for $2.9 billion.

8) Witnessing a $376 million financing package in Dumbo$376 million

25-30 Columbia Heights

25-30 Columbia Heights

Kushner Companies, CIM Group and LIVWRK bet big on Dumbo when they picked up the Jehovah’s Witness Watchtower building at 25-30 Columbia Heights this summer for $340 million. They quickly grabbed $376 million in loans from Blackstone Mortgage Trust and SL Green Realty, in what is one of the largest financing transactions recorded in so far in Brooklyn in 2016. The developers will likely spruce up and reposition the 733,000-square-foot Jehovah’s Witnesses headquarters, as they are already doing with five nearby buildings they acquired from the religious group.

9) The Other One Seaport refi$295 million
JackResnick & Sons refinanced its 1.1-million-square-foot office tower at One Seaport Plaza (not to be confused with Fortis Property’s 1 Seaport) with a $295 million loan from the AXA Equitable Life Insurance Company. The new debt replaces an existing $240 million mortgage from Morgan Stanley and adds on another $55 million. The 32-year old building at One Seaport Plaza is currently fully leased-up. Singer & Bassuk Organization’s Scott Singer brokered the financing.

10) A sizable loan for Richard Mack $290 Million
The Mack Real Estate Group and Palin Enterprises received $290 million from the New York State Housing Finance Agency to develop a Greenpoint waterfront apartment tower at 10 Huron Street. The partners paid $84.57 million for the site over a decade ago. The project is expected to include 640 apartments (20 percent of which will be affordable) and 95 condo units.

Adam Pincus contributed research to this report.

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