Herald Square hotel-condo developer seeks financial partner

New York /
Sep.September 22, 2008 06:09 PM

In this challenging financial climate, the developer of a 35-story hotel-condo in Herald Square is seeking more experienced partners to help foot the $100 million-plus bill, an official close to the deal said.

New Jersey-based Sunshine Developers bought the site at 309-311 Fifth Avenue at 31st Street, as well as adjoining air rights, for $50 million in late 2006, said Benjamin Bottner, investment sales associate at real estate advisors Marcus & Millichap, and a broker on the current deal. A year later, the developer demolished the five-story building on the site, and this year won city approval for an Ismael Leyva-designed building with a 212-room hotel and 39,000-square-foot residential building.

Sunshine Developers, who did not return a call for comment, is a relative newcomer to new construction and has found it difficult to obtain financing in the tighter lending climate, Bottner said. The main business for the principals of the development company is Victoria Classics, an international manufacturer and importer of textiles.

“The push behind the joint venture is a name on the project with a long track record that helps secure construction financing with the best possible terms,” Bottner said. “In today’s market it is next to impossible to get construction financing without a solid sponsor.”

The project could be altered, as well, he said, if the partner wanted that. The developer’s offering plan says it would consider converting it to a hotel only; a hotel with extended stay; residential only; or student housing.

The site is valued at $400 per buildable foot, said Ross Mezzo, office investment specialist at Marcus & Millichap. That would put the total value at $56.4 million for the 141,000 square feet of buildable space. The project would cost at least $43.6 million on top of that.

John Cicero, managing principal at commercial appraisal firm Miller Cicero, said that despite the general decline in real estate values from the credit crunch, the $400 per foot value was close to prices for similar sites in 2007.

“I think it is consistent to where it was a year ago,” he said.
 
 


Related Articles

arrow_forward_ios
Matt Lauer exposes Hamptons estate to the market
Matt Lauer exposes Hamptons estate to the market
Matt Lauer exposes Hamptons estate to the market
 Fredrik Eklund and the property (Getty, Steve Frankel)
Fredrik Eklund lists Bel Air mansion for rent as family moves to “forever home”
Fredrik Eklund lists Bel Air mansion for rent as family moves to “forever home”
Gordon Ramsey and his Lucky Cat restaurant (Lucky Cat)
Gordon Ramsay to open first South Florida restaurant in Miami Beach
Gordon Ramsay to open first South Florida restaurant in Miami Beach
Bentley Zhao and 58-01 Queens Boulevard (New Empire Real Estate, Google Maps, iStock)
New Empire plans ambitious condo in quiet Woodside
New Empire plans ambitious condo in quiet Woodside
From left: 11 Hoyt Street and 370 Eighth Street
See clear across Brooklyn, unclothed: Buyer claims $5M penthouse
See clear across Brooklyn, unclothed: Buyer claims $5M penthouse
Rudin Management CEO Bill Rudin and 3 Times Square (Getty Images, 3 Times Square, iStock)
Rudin gets $415M refi for 3 Times Square makeover
Rudin gets $415M refi for 3 Times Square makeover
(iStock)
Bidding wars proliferate in rental market
Bidding wars proliferate in rental market
1060 Fifth Avenue (Google Maps, iStock)
Fifth Ave co-op tops another slow week for Manhattan luxury contracts
Fifth Ave co-op tops another slow week for Manhattan luxury contracts
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...