The Real Deal New York

Durst secures $1B loan package from group led by Citi’s private bank

Financing includes $400M credit line
By Konrad Putzier | July 13, 2017 12:00PM

From left: 655 Third Avenue, Citi’s Peter Charrington and Durst’s Ira Marx

The Durst Organization secured a $1 billion financing package from a group of lenders led by Citi Private Bank, with plans to potentially use some of the money for acquisitions.

The package includes $600 million in mortgage debt on five Manhattan properties and a $400 million credit line, Durst’s chief financial officer Ira Marx told The Real Deal. Citi chipped in $650 million, JPMorgan Chase $100 million, TD Bank $100 million, Bank of New York Mellon another 100 million and California-based City National Bank added $50 million.

The properties supporting the mortgage are 655 Third Avenue, 825 Third Avenue, 114 West 47th Street (the three buildings previously had a combined $300 million in mortgages, which the new loan replaces), 675 Third Avenue and 201 East 42nd Street (the two buildings previously had no mortgage debt, according to Marx).

Marx argued that the advantage of taking out a single loan package, as opposed to negotiating mortgages one by one, is that it’s cheaper and saves time. “If you take the bus to the train it takes more time even if it’s the same distance,” he said.

The new $400 million credit line expands the firm’s previous credit line by $100 million. Being able to draw on that much debt can allow an investor to quickly close on properties — a key advantage in a fast moving market.

In December, for example, Durst went into contract and closed on the $175 million acquisition of the Clocktower development site in Long Island City on the same day.  The firm plans to build a 63-story rental tower on the site and is also working on the seven-building, $1.5 billion Hallets Point development on the Queens waterfront.