The Real Deal New York

PMG and Madison Equities score $95M loan for 10 Sullivan

The financing was provided by an offshore lender

March 30, 2014 12:00PM

Robert Gladstone, 10 Sullivan Street and Kevin Maloney of PMG

From left: Madison Equities head Robert Gladstone, 10 Sullivan Street and Kevin Maloney of PMG

WEEKENDEDITION Property Markets Group and Madison Equities have received $95 million in financing to build the luxury condominium planned for 10 Sullivan Street in Soho.

The project calls for 19 luxury condos and four five-floor townhomes to be built over the next 24 months.

According to the New York Observer, the five-year construction loan was provided by an offshore lender without recourse.

“80-percent loan-to-cost construction financing for a ground-up condominium development is incredibly rare in the current market cycle,” Jason Cohen, managing director of Mission Capital Advisors, which negotiated the loan, said in a statement.

Mission Capital’s director Ari Hirt added that the interest rate on the loan was “unexpectedly low for this leverage.” [NYO]Christopher Cameron

  • Proper

    for boutiqe and high end projects there is an argument to be made that lenders should go higher on loan to cost because loan to values for this cycle are much lower given the astronomical condo pricing.

    of course the rental fallbacks now are much lower

    also 20% is enough skin in the game to keep the developer engaged

    • WannaBeLandlord

      High LTVs will cause a crash. It will cause too many projects at once. Land prices will bid up, labor will bid up, and buyers will dry up. A developer never stops building if they have next to no cash in the project. That is how every building crash happens. One day people wake up to a lot of inventory and little buyer activity. Also banks never recoup high LTV loan loses when they have to sell a concrete skeleton.

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