At a time when money is tight, banks are still banking on the high-end residential market, while some home buyers are looking for a way to cash out.
Five months later, J.P. Morgan Chase wrote a $20 million mortgage for the unit, signed on September 22, records published Friday showed. That was three days before Chase bought deposits and branches of the failed thrift Washington Mutual for $1.9 billion.
Kevin Comer, senior managing director of development company Beck Street Capital, who was not involved in the transaction, speculated that the owner may have wanted to release some equity that was tied up in the property.
“One way to interpret it is that the owner is cashing out,” he said.
Some experts say that the fact that Chase gave a loan of such size for a residential unit is an indication that the bank believes high-end residential properties remain solid investments, real estate experts said.
Attempts to reach the buyer though its attorney were unsuccessful. A spokesman for Chase declined to comment.
To receive a loan of $10 million or more for a single condominium in a tight credit market is unusual, said Jonathan Miller, president and CEO of appraisal firm Miller Samuel.
“In our view it is fairly rare to see a [residential apartment] mortgage over $10 million” under normal circumstances, Miller said. “It shows the bank is very confident in the collateral, and that is logical given the strength of the luxury market in New York.”
The bank has made at least one other large investment at The Plaza. Chase wrote two mortgages in July totaling $19 million for unit 1809 to An Entity Called Th Plaza Holdings city records showed. In that case, the mortgages were filed at the same time as the deed, which recorded the price for the unit at $25.048 million, records showed.
Attorney Kenneth Fisher, a partner at law firm WolfBlock’s real estate group who had nothing to do with The Plaza transactions, said the fact that Chase could offer a loan just last week shows that the market has not completely halted for residential mortgages.
“What it indicates is that the credit markets haven’t 100 percent shut down, if you are a credit-worthy borrower with a balance sheet and assets,” he said.