HFZ closes on $1.25B construction loan for Chelsea megaproject

UK hedge fund TCI provides one of the biggest-ever condo financing packages

TRD New York /
May.May 09, 2017 05:18 PM

Ziel Feldman’s HFZ Capital Group TRData LogoTINY closed Tuesday on a $1.25 billion construction loan for its Chelsea megaproject the Eleventh, The Real Deal has learned. The construction loan, from the Children’s Investment Fund (TCI), is one of the largest of this cycle, particularly for a project with a large residential condominium component.

The project is expected to cost $1.9 billion, giving the financing a loan-to-cost ratio of 66 percent. The 950,000-square-foot development consists of two Bjarke Ingels-designed towers and includes 240 condos, a 137-key five-star hotel operated by Six Senses Hotels Resorts Spas, and a 90,000-square-foot retail component. HFZ has said that asking prices for the apartments will range from $4 million to $8 million. Condo sales are slated to launch later this year, and the project’s completion is expected in 2019.

The deal puts an end to HFZ’s roughly 18-month search for financing. The firm paid an investment group led by Edison Properties $870 million, or $1,100 per buildable square foot, for the site at 76 11th Avenue, between West 17th and 18th streets, in 2015. A consortium of lenders including JPMorgan Chase, BlackRock and SL Green Realty provided $1 billion in acquisition and predevelopment financing at the time.

London-based hedge fund TCI signed a term sheet for the construction loan in October, as TRD first reported, and negotiations persisted well into 2017.

Howard Michaels’ Carlton Group served as the adviser on the construction financing deal.

Representatives for HFZ declined to comment, as did representatives for Carlton and TCI.

TCI, which has been one of the city’s most active lenders for luxury condo construction, has provided loans for 15 Hudson Yards, 432 Park Avenue, 30 Park Place, 520 Park Avenue and most recently Ceruzzi Properties and Kuafu Properties’ 18-story Upper East Side project at 151 East 86th Street.

Even major developers with long track records have found nailing down construction financing to be tricky over the last year-and-a-half. Extell Development is still seeking a $900 million construction loan for Central Park Tower and Macklowe Properties is searching for an $850 million construction loan for One Wall Street, down from $1 billion.

Some of the biggest new project financings of this cycle include GID’s $2.3 billion debt-and-equity package for the three-building Waterline Square project on the Upper West Side and Related Companies’ financing for the retail component at Hudson Yards. GID’s package included $1.24 billion in construction financing from a Wells Fargo-led group.

(To view more properties owned by HFZ Capital Group, click here)


Related Articles

arrow_forward_ios
With a cooling trade war, stocks perform well, including real estate. (Credit: iStock)

Real estate stocks push up this week as U.S.-China trade tensions ease

Real estate stocks push up this week as U.S.-China trade tensions ease
416 West 25th Street and Maverick Real Estate Partners principal David Aviram (Credit: Google Maps and LinkedIn)

Chelsea landlord claims “predatory” lender is charging a crippling interest rate as punishment after losing foreclosure case

Chelsea landlord claims “predatory” lender is charging a crippling interest rate as punishment after losing foreclosure case
From left: Trinity Investments CEO Sean Hehir and Benchmark Real Estate Group principals Aaron Feldman and Jordan Vogel (iStock, LinkedIn, Trinity Investments)

“Blank-check” companies make a comeback in real estate

“Blank-check” companies make a comeback in real estate
Vishaan Chakrabarti of Practice for Architecture and Urbanism and Hiten Samtani of The Real Deal (Getty)

Vishaan Chakrabarti on a Manhattan real estate market without private cars

Vishaan Chakrabarti on a Manhattan real estate market without private cars
Starwood Capital Group CEO Barry Sternlicht (Getty)

Starwood eyes $11B raise for real estate, distressed bets

Starwood eyes $11B raise for real estate, distressed bets
NY Community Bank president Joseph Ficalora

NYC’s biggest multifamily lender says rent collections are holding steady

NYC’s biggest multifamily lender says rent collections are holding steady
Vishaan Chakrabarti of Practice for Architecture and Urbanism and Hiten Samtani of The Real Deal (Getty)

The REInterview: What if Manhattan had four Central Parks’ worth of land to play with?

The REInterview: What if Manhattan had four Central Parks’ worth of land to play with?
Maefield Development’s Mark Siffin and 20 Times Square (Google Maps, iStock)

TRD Insights: Untangling Times Square Edition’s “Gordian Knot” of debt claims

TRD Insights: Untangling Times Square Edition’s “Gordian Knot” of debt claims
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...