Extell Development’s One Manhattan Square is now fully funded, thanks to a commitment for an additional $163.2 million in mezzanine financing from Scott Rechler’s RXR Realty.
RXR agreed to provide the funds on top of the $300 million it already provided for the project in August, according to filings on the Israeli bond market. With the new financing from RXR, EB-5 funding and a senior loan from a consortium led by Deutsche Bank and Natixis, the project, slated to cost $1.4 billion, is now 100 percent financed, Extell said in the filings.
The deal marks a successful end to a long and difficult quest for Extell’s Gary Barnett, who had to secure financing for the project amid a hostile construction lending market.
RXR had agreed in March 2016 to provide $463 million in loans, but later reduced that to $300 million after there were delays in making a deal for the senior debt. As a result, the interest rate on RXR’s loan also jumped from 7 percent to 8 percent.
“It was a struggle,” Barnett admitted in a September interview. “We thought we’d be able to get a higher loan per square foot price than we were able to achieve. We had to lower our sights by more than 10 percent and pay a little bit more.”
The project, at 252 South Street, comprises 815 units and over 100,000 square feet of indoor and outdoor amenities. Sales at the property launched in November, with prices ranging from $1.18 million for a 723-square-foot one-bedroom unit to $3.5 million for a three-bedroom unit spanning 1,400 square feet. It’s not clear how many units have been put in contract.
“Gary Barnett and his team continue to do a great job and all of the projects are on target,” Rechler said of his decision to increase the value of the loan.
Barnett’s not yet done wooing lenders, however. He’s still in the market for a $900 million construction loan for another project, Central Park Tower at 217 West 57th Street.