Silverstein transferred EB-5 funds from 2 WTC to Macklowe’s 1 Wall Street

Developer had secured $2.2B loan from sovereign wealth fund - then Murdoch backed out

Nov.November 17, 2016 07:00 PM

When Rupert Murdoch ditched 2 World Trade Center, it threw the project’s future into doubt. But it looks like there was at least one winner to emerge from the turmoil: Harry Macklowe.

Silverstein Properties had raised roughly $70 million in EB-5 financing when Murdoch decided against moving his two companies — News Corp. and 21st Century Fox — into the building. Instead, Silverstein won approval from most of the EB-5 investors to transfer their contracts to Macklowe for his $1.5 billion office-to-residential conversion on One Wall Street, Silverstein CEO Marty Burger said during a panel at an annual NYU conference on Thursday.

Silverstein had aimed to raise a total of $500 million in EB-5 funds for the 2.8 million-square-foot project, meaning that some 1,000 investors would each have to contribute the permitted $500,000.

Murdoch’s pullback also scuttled one of this cycle’s largest construction loans. Silverstein Properties had won a commitment for a $2.2 billion loan from an unnamed soverign wealth fund. But without an anchor tenant, that loan fell apart and the project’s future remains in limbo.

In June 2015, Murdoch’s News Corp. and 21st Century Fox signed a non-binding letter of intent to lease 1.3 million square feet in the planned 2.8 million-square-foot office tower. But in February the firms changed track and decided to renew their leases at 1185 and 1211 Sixth Avenue instead.

Macklowe is currently seeking a $1 billion construction loan for its conversion project, which will hold condos, rentals and a Whole Foods.

Konrad Putzier contributed reporting

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