Trump Soho gets new $20M loan

By David Jones | September 15, 2010 09:30AM

Donald Trump, Alex Sapir and Trump Soho

Trump Soho, the recently opened condominium-hotel in Lower Manhattan,
has received another $20 million in financing after restructuring its
mortgage loan with iStar Financial, according to newly released
documents filed with the city Department of Finance.

Manhattan-based iStar now has $295 million in mortgage loans secured
by the property, marking one of the biggest loans in the lender’s
portfolio.

“Trump Soho ownership confirms that the public record is correct,”
said a spokesperson for Trump Soho. “The increase in the loan amount
demonstrates the ongoing confidence and support of our lender, iStar.”

The loan comes at a time when Trump Soho, at 246 Spring Street, is
under intense scrutiny regarding individual condo sales. As The Real
Deal
first reported, the developers of Trump Soho made repeated claims
in recent years that a majority of Trump Soho’s condo units were sold,
but Alex Sapir, president of the Sapir Organization, signed an
affidavit in March stating that only 62 of the 391 units were sold to
bona fide buyers. The Sapir Organization co-developed the project with
Manhattan-based Bayrock Group, while the Trump Organization handled
management and marketing of the project, led largely by Donald Trump’s
daughter Ivanka and son Donald Jr.

Following the Sapir disclosures, a group of 16 purchasers filed suit
in U.S. District Court against the developers, claiming that they
misled potential buyers about the number of sales in the building.

Since 2008, the Trumps and officials at Bayrock were quoted in
numerous publications stating the project was more than 50 percent
sold and in some cases stated the project was more than 70 percent
sold.

Closings began at Trump Soho in May, and sources told The Real Deal
that the weak financing environment for hotel-condos, and concerns
about the financial status of Trump Soho in particular, have made it
nearly impossible to find a lender to provide financing to individual
buyers. Sources said that Trump Soho officials have begun sending out
default notices to buyers, as some have been unable to get loans for
their units.

“I was never able to find any options [for clients] for the Trump Soho
because it’s a condo-hotel,” said Debra Schulz, managing director at
Manhattan Mortgage, the biggest residential mortgage broker in the
city.

The developers have begun offering a so-called seller financing option
for buyers who cannot find traditional mortgages through outside
banks.

“CalCon Mutual Mortgage is accepting applications from qualified
existing buyers on the sponsor’s behalf and closings are continuing on
a steady pace with some unit owners closing with financing,” said
Rodrigo Nino, president of Prodigy International, the exclusive sales
and marketing broker for Trump Soho. San Diego-based CalCon has
provided mortgages for buyers at some of the country’s most upscale
resort projects, including the Ritz Carlton Kapalua in Maui, Hawaii
and the St. Regis Resort & Residences at Park City, Utah. In New York,
the lender has provided financing for buyers at the Laurel
condominium, developed by Alexico.