The Real Deal New York

Developers score inventory loan for long-delayed Noho condo project

SDS and Richport infuse more equity into 22 Bond Street 
By Rich Bockmann | February 05, 2018 02:17PM

Renderings of 22 Bond Street with Josh Zegen

Louis Greco’s Second Development Services and the Richport Group bought themselves some extra time to complete their long-delayed boutique condominium project in Noho, where the developers had planned to list a penthouse for $20 million.

The partners not only refinanced the six-unit, $85 million property at 22 Bond Street, but also infused more equity into the project. They renegotiated the terms of their construction loan to extend the maturity date, lender Madison Realty Capital told The Real Deal.

Madison’s Josh Zegen said he restructured the $45.5 million construction loan after buying the performing first mortgage and mezzanine loan late last year on the project, which is also known as 35 Great Jones Street.

“We basically restructured the loan to give more term and a little bit more money to complete the job,” said Zegen, who added that the project is about 95 percent complete.

Representatives for Second Development Services and Richport could not be immediately reached for comment.

Greco’s SDS purchased the narrow lot near the corner of Lafayette Street in 2007 for $8.5 million. The site reportedly went through different ownership structures as the developers switched plans from a hotel to a condo project and sought various approvals from the Landmarks Preservation Commission, the Board of Standards and Appeals and the Department of Buildings.

The developers had reportedly planned to finish construction in 2015. But the project fell behind schedule and they turned to Glacier Global Partners that year to refinance the original acquisition and construction loan provide by Starwood Capital Group to the tune of $28 million.

The project’s condo offering plan showed they had planned to sell a nearly 4,000-square-foot penthouse with an asking price of $19.88 million, or $4,999 per square foot. The unit appears to have never hit StreetEasy, and Zegen declined to elaborate on units sold at the property.

In the meantime, the sponsors have raised the total projected sellout of the project from the initial figure of $76.2 million in 2014 to $85.2 million.

Condo developers across the city are increasingly renegotiating the terms of their construction loans and bringing on interim financing as the sales market has slowed.

Madison has worked with Greco in the past, providing his firm with a short-term $9 million loan for the acquisition of a Brooklyn development site at 232 Smith Street.