SMI extends the deadline for financing
Central Park Tower

Extell's Q2 report show a loss of $8M

TRD New York /
Aug.August 29, 2017 02:01 PM

Gary Barnett

For the third time, Shanghai Municipal Investment, a key equity investor in Extell Development’s Central Park Tower TRData LogoTINY project, has given Gary Barnett a lifeline, according to Extell’s second-quarter financial report.

On Aug. 24, SMI agreed to extend the deadline that would trigger a put option on its investment from December 2017 to June 2018, which gives Barnett some breathing room to complete financing for the supertall. The developer is negotiating with JPMorgan Chase over a $900 million construction loan for the project.

There were a few additional sources of financing for the tower in the second quarter. Extell raised an additional $75 million in EB-5 money, received a $47.5 million payment from Nordstrom, which is paying for a retail flagship at the base of the tower, and sold 7,000 square feet of air rights for $2.5 million.

The tower, which will be New York’s tallest residential tower, has so far risen 515 feet out of a total 1,550 feet.

Barnett also announced that he would consider a buyback of up to $50 million in Series A bonds on the Israeli market, before the bonds come due in December 2018. The bonds have been trading at double-digit yields, and were downgraded a notch earlier this week. The move signals Barnett’s confidence in the health of the bonds, a spokesperson said.

The bonds are trading at high yields because of concerns over Extell’s liquidity and the news from One57 isn’t likely to dispel that concern. Barnett sold two of 48 remaining units at the 75-story tower, at $3,100 a square foot, compared with $4,900 in 2016.

Extell has $708 million in debt coming due within a year of June 30, 2017, but expects to refinance the $572 million loan from SMI and extend a $76 million loan on its Times Square portfolio for six months.

The financial reports show a loss of $8 million, compared with $30 million in the previous quarter, and $10 million in 2016.

“We are making progress on all levels, finance, sales and construction,” Barnett said in a statement. “The company has a strong balance sheet, high liquidity, and is well-positioned for the coming years.”

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