The Real Deal New York

Blackstone, Ivanhoe lock in additional $150M for Stuy Town

Wells Fargo had provided $2.7B in acquisition financing in 2015
By Chava Gourarie | March 31, 2017 03:30PM

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Stuyvesant Town and Blackstone’s Jonathan Gray

UPDATED Apr. 4, 2017, 10:40 a.m.: Blackstone Group and Ivanhoe Cambridge secured $150 million in financing from Wells Fargo for Peter Cooper Village-Stuyvesant Town, on top of the $2.7 billion acquisition loan provided by the bank in 2015.

The original loan agreement allows Blackstone to maintain a 50 percent loan-to-value ratio on the property, and the new loan reflects an increase in the property’s value, according to a source familiar with the loan. That puts the apartment complex’s value at $5.7 billion.

Existing debt on the property includes the acquisition loan on Blackstone and Ivanhoe’s $5.3 billion purchase, which was originated by Wells Fargo and passed to Fannie Mae. The mortgage giant planned to sell it to investors as commercial mortgage-backed securities, but the loan has not yet been securitized, sources said.

In addition, the city supplied Blackstone with $144 million, which was a loan in name only since the firm won’t be required to pay it back. The $144 million is equal to the transfer tax Blackstone paid on the deal, which was valued at $5.46 billion.

All three of the mortgages are backed by the 11,200-unit complex and specifically exclude 250,000 square feet of air rights. These include 25,000 square feet for commercial use, 25,000 square feet for residential use, and 200,000 square feet for a community facility.

Blackstone and Ivanhoe Cambridge’s purchase of Stuy Town was the city’s biggest single-asset trade since the same complex sold in 2006. In a deal with the city, Blackstone agreed to keep 5,000 units affordable for 20 years in exchange for a $225 million subsidy package.