The priciest condo project in New York history is finalizing a $900M loan

Financing from JPMorgan-led group allows Extell's Central Park Tower to move ahead; one of the biggest loans of this cycle

TRD New York /
Jun.June 23, 2017 05:01 PM

Rendering of Extell’s Central Park Tower, JPMorgan’s Jamie Dimon and Gary Barnett

Gary Barnett’s Extell Development is finalizing a $900 million construction loan for Central Park Tower, The Real Deal has learned. The financing would allow Barnett to proceed with the ultra-luxury condominium tower at 217 West 57th Street, which is the priciest residential project in New York City history with a $4 billion sellout. It would also be one of the largest condo construction loans of this cycle.

Extell TRData LogoTINY signed a term sheet this week with a group of lenders led by JPMorgan Chase, sources familiar with the matter said. Closing on the loan would end an 18-month quest for financing for the 179-unit, 1,550-foot supertall project, which many real estate insiders bet would never get built.

Representatives for Extell and JPMorgan declined to comment. The loan is the final piece in an intricate capital stack, which includes $168 million in EB-5 funds, a $300 million equity investment from SMI USA, the U.S. subsidiary of Shanghai’s largest state-owned enterprise, and interim financing from lenders such as JPMorgan, Blackstone Group and Fortress Investment Group. (In October, TRD took a deep dive into Barnett’s search for funds for the tower.)

In an interview with TRD in March, Barnett said he was targeting a $900 million construction loan.

“That only represents $1,800 a foot. It would be a very conservative construction loan,” Barnett said.

Last month, the New York State Attorney General’s office approved the offering plan, allowing sales to launch. With a projected sellout of $4.02 billion, the project has the priciest offering plan ever accepted by the city, followed by Vornado Realty Trust’s 220 Central Park South at $3.4 billion.

Meanwhile, the price of Extell’s bonds on the Tel Aviv Stock Exchange has fallen between 5 and 7 percent since May, raising concerns among investors in Israel. Barnett defended his firm’s position in the Israeli press, saying: “We have high capital levels and very low leverage. Whoever takes a deeper look feels very comfortable with the situation.” As of Wednesday, Extell’s bonds were trading at yields of 13 percent.

JPMorgan is also in late-stage talks to provide an $850 million construction loan for Macklowe Properties’ office-to-residential Condo Conversion One Wall Street.

(To view more of Extell Development’s financing transactions, click here)

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