TD ramps up NYC real estate lending – but stays cool on condos

Canadian bank lent $2.75B for local projects in 2014

Jun.June 19, 2015 11:00 AM

TD Bank expanded its U.S. real estate lending by 9.5 percent in 2014, issuing $6.3 billion in new loans, in a further sign that major banks have regained their groove following the financial crisis. But while the Canadian lender is bullish on New York City as a whole, its head of U.S. real estate lending expressed caution over the luxury condominium market.

“That is not a market that we feel is deep,” Gregg Gerken, Senior Vice President at TD Bank Group and Head of U.S. Commercial Real Estate Lending, told The Real Deal. “It’s foreign capital that’s driving it and it’s a lot of reliance on foreign buyers as well.”

Gerken’s comments come at a time when major North American lenders have largely retreated from financing the city’s tallest uber-luxury condo towers, leaving the field to foreign lenders such as the Children’s Investment Fund and the Bank of China.

The last major luxury tower in Manhattan that TD Bank financed was Extell Development’s One57. The Canadian bank was part of a syndicated $700 million construction loan led by Bank of America that closed in 2011. Roy Chin, TD’s regional director for commercial real estate in New York, said that the bank chose to join in on that deal because Extell offered “alternative exit scenarios” if condo sales didn’t go as planned – such as conversion to rentals.

While TD is cautious on condos, it has been an active lender for multifamily projects and new construction in the Big Apple. The bank issued $2.75 billion in new loans for New York projects in 2014 alone (see chart above), almost half of its total U.S. deal volume. Its second biggest market, New England, was well behind at $1.18 billion.

TD’s recent commitments include a $50.6 million construction loan for the Naftali Group’s condo development at 261 West 25th Street and a $95 million refinancing loan for the Rabsky Group’s Leonard Pointe rental building at 395 Leonard Street in Williamsburg.

Related Articles

(Image by Wolfgang & Hite via Dezeen)

Hudson Yards megadevelopment inspires a new line of sex toys

Cammeby's International Group founder Rubin Schron and, from top: 194-05 67th Avenue, 189-15 73rd Avenue and 64-05 186th Lane (Credit: Google Maps)

Ruby Schron lands $500M refi for sprawling Queens apartment portfolio

Wendy Silverstein (Credit: Getty Images)

Wendy Silverstein, co-head of WeWork’s real-estate fund, is out

An illustration of Chairman of Starwood Capital Group Barry Sternlicht (Credit: iStock)

Sternlicht on retail’s woes: Tenants have done “incredibly shitty job” running stores

Clockwise from the bottom: Judge Arthur Engoron, JDS Development’s Michael Stern, L&M’s Ron Moelis, Josh Siegel of Starrett with a rendering of Two Bridges (Credit: Twitter and Curbed NY)

Judge deals another blow to Two Bridges towers

RFR Realty's Aby Rosen, 900 Third Avenue, and Paramount's Albert behler (Credit: Getty Images, Google Maps)

Aby Rosen in talks to buy Paramount’s East Side tower for $400M

Fifth Wall Ventures' Brendan Wallace and Kevin Campos (Credit: iStock)

Fifth Wall closes $100M fund to bring online retailers into physical stores

Governor Andrew Cuomo and Mayor Bill de Blasio (Credit: Getty Images)

Cuomo expects NYC to take lead on property tax reform