UPDATED Aug. 30, 4:30 p.m.: Michael Shah’s Delshah Capital entered into a non-binding contract for a $130 million construction loan to finance a five-building project in Morningside Heights, the company reported on the Tel Aviv Stock Exchange.
Square Mile Capital will provide the funding, which will go towards financing the conversion of the five-building complex at 30 Morningside Drive into 205 high-end rentals. The projected cost of the development is $250 million.
Shah plans to contribute the remaining $122.5 million needed for the project, which it will fund with a combination of EB-5 money, the $52 million he raised in a recent bond issuance in Tel Aviv, and his own capital. Delshah purchased the complex for $102 million in 2014, also with funds raised in Tel Aviv.
According to the terms of the loan, income from the property will be held in a special account that will serve as collateral for the lender in addition to the property.
The three-year loan can be extended up to three times for a total of four years. The interest rate will be negotiated in the final contract, but will be be a minimum of 3 percent pegged to LIBOR, according to the documents filed on TASE.
Adam Hakim and James Murad from Eastern Consolidated brokered the deal with Square Mile on behalf of Delshah.
The deal is expected to close by November.