Joseph Chetrit’s Chetrit Group and David Bistricer’s Clipper Equity are looking to secure a new loan worth around $1.4 billion for the conversion of Sony’s former headquarters into ultra-luxury condominiums and a swank hotel at 550 Madison Avenue.
The developers recently arranged a six-month extension for the $900 million they currently have in loans.
Chetrit and Clipper Equity bought the 36-story, 700,000-square-foot tower in Midtown from Sony for $1.1 billion in 2013. For the acquisition, the developers secured around $300 million in mezzanine debt from SL Green Realty and a $600 million mortgage from the Bank of China, Crain’s reported.
The new loan is to pay off the lenders and to finance the Robert A.M. Stern-designed conversion of the tower into 96 units, which will include a $150 million penthouse, according to Crain’s. The developers are targeting a total sellout of $1.9 billion and tapped Douglas Elliman’s Roger Erickson to handle sales.
Oetker Hotel Management Company, a German hotel operator, will run the 170-key New York Masterpiece. A source told Crain’s that the Oetker deal required extensive changes to the design and insisted the developers were not having trouble securing new debt. Bistricer and Chetrit have poured over $200 million of their own money into the project, a source told Crain’s.
Banks are being more cautious when it comes to financing commercial real estate, especially luxury condominiums amid global market turmoil, falling oil prices, and an oversupply of product. [Crain’s] — Dusica Sue Malesevic