The Real Deal New York

Extell secures $168M in EB-5 funds for Central Park Tower; project’s completion date pushed back

Barnett's firm still seeking $900M construction loan
By Chava Gourarie | March 29, 2017 12:20PM

From left: Central Park Tower, Gary Barnett and One Manhattan Square

In a call to Israeli bondholders Wednesday, Extell Development’s Gary Barnett reported that his firm had secured $168 million in EB-5 funds for Central Park Tower, the supertall condominium project set to rise on Billionaires’ Row.

Up to $340 million in EB-5 funds may be raised for the 95-story tower at 225 West 57th Street, Extell’s filings on the Israeli stock exchange show. The $168 million brings Barnett one step closer to procuring the $1.2 billion needed to complete the project. According to an agreement with Shanghai Municipal Investment, which invested $300 million in the project in May, Barnett must procure the funding by December 2017.  Extell is still searching for a $900 million construction loan.

Since 2014, Extell has spent $939 million on the tower in construction, acquisition, and financing costs, close to $300 million of which were incurred in 2016, the filings show. The $4.4 billion sellout remains unchanged, while the completion date has been pushed back a year to November 2020, according to the year-end report.

The seven-story Nordstrom store at the base of the building is now complete, and construction has started on the residential floors above. Nordstrom’s contribution to the project increased to $426 million from $394 million, of which the retailer has paid $201 million. Nordstrom retains a put option on its investment if the store is not delivered by December 2018.

Barnett discussed the eventful and oftentimes harrowing year for his firm, reviewing the progress of both CPT and One Manhattan Square, his 815-unit project on the Lower East Side.

One Manhattan Square became fully funded as of January 2017, and 50 of the building’s 80 stories are complete. The financing includes $463 million from RXR Realty, and $125 million in Eb-5 funding, the filings show.

The two series of Extell bonds, which soared to 14 and 15 percent yields in May, have recovered. With current yields at just over 9 percent, however, they still reflect a measure of risk to bondholders.

Last week, The Real Deal sat down with Barnett to discuss the two projects as well as Extell’s plans for the year.

(To see a selection from our database of other properties owned by Extell Development, click here)