Ziel Feldman’s HFZ Capital Group 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)