Victor Group and Lendlease can forge ahead with their condominium project at 281 Fifth Avenue following a new $369 million debt and equity injection.
The companies landed $100 million in new preferred equity from May Bao Ltd., a subsidiary of real estate giant Beijing Capital Development Holdings Co.
In addition, they secured a $269 million construction loan from a consortium of Singaporean banks, led by United Overseas Bank, the same lender behind projects such as the MoMa Tower and 200 East 59th Street. Overseas Chinese Banking Corporation and DBS Bank also participated.
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The Wall Street Journal first reported the news of the financing deals.
“It’s a great moment for the project and means we can move full steam ahead on vertical construction,” said Melissa Burch, executive general manager at Lendlease. “It’s final linchpin.”
Ran Korolik of Victor Group said its previous relationship with UOB was important in securing the debt. UOB also financed its project at 239 Tenth Avenue.
“Right from the get go, we knew that it was possible to get to finish line with them,” he said. “But in the environment today, they prefer to mitigate some of the risk by clubbing together with other banks.”
The sponsors provided a combined $100 million for the project, he said. Sources said Victor holds a 60 percent stake in the sponsorship entity.
Burch admitted the financing environment had been challenging. The sponsors looked to the EB-5 immigration program for cash before settling on preferred equity.
“EB-5 was considered early on,” she said. “But the shifting legislative environment caused us to look elsewhere to ensure that when we got to finish line we had what we needed. It’s been close to a year where there’s been legislative limbo on EB-5.”
State Senators Liz Krueger, Velmanette Montgomery, Roxanne Persaud, and James Sanders, Jr., all of New York City, inked a letter to the New York Congressional Delegation earlier this month advocating against renewing program, which gives out green cards in exchange for investment in U.S. projects, because of past problems of abuse.
“There’s no doubt there are projects that will stall or slow down,” Burch said of the financing environment.