Ironstate-led group scores $250M in debt, equity for Hell’s Kitchen condo project

Baupost Group invests $70M in preferred equity; Deutsche provides construction loan

New York /
Jun.June 14, 2018 04:31 PM
 

Ironstate Development principal Michael Barry and 646 11th Avenue (Credit: Google Maps)

UPDATED, Thursday, June 14 at 4:58 p.m.: CBSK Ironstate has scooped up a debt-and-equity package totaling more than $250 million for its 12-story, 222-unit condominium project in Hell’s Kitchen.

The company — a partnership between Ironstate Development, CB Developers and SK Development Group — secured a $181 million construction loan from Deutsche Bank and $70 million in preferred equity from Boston-based hedge fund Baupost Group.

CBSK and JLL, which brokered both deals, confirmed them to The Real Deal, but declined to identify the new equity partner. Sources however said it is Baupost, which has also invested in the redevelopment of 441 Ninth Avenue.

Simultaneously, CBSK also closed on the $93 million purchase of the two-story Lexus dealership on the site at 646 11th Avenue. They had been in contract since December.

The site spans the full block between West 47th and 48th streets, where Lexus would remain. Plans call for a new structure, with 161,000 square feet of apartments, 40,000 square feet of pre-sold retail space and 60 for-sale storage units. CBSK would build out the ground floor and basement, and sell it back to Lexus.

The Japanese automaker paid about $30 million for the forthcoming commercial condo, said Ironstate Development’s Michael Barry.

With the debt and additional equity in place, work has begun at the site. Demolition began earlier this month, and the project is slated for completion by late 2020, Barry added.

A JLL team led by Aaron Appel, Keith Kurland, Jonathan Schwartz and Doug Baillie brokered the debt-and-equity package.

“The future of the area is being re-shaped with around 17 million square feet in retail, commercial and residential space underway,” Appel said in a statement. “This transaction offered the lenders an opportunity to finance one of New York’s most experienced residential developers in a project with significant risk mitigation.”

The three firms have also partnered on the development of residential properties such as 10 Bond Street, the Lindley at 591 Third Avenue, and Chelsea 29 at 221 West 29th Street.

Correction: A prior version of this story incorrectly stated that Baupost invested in 111 West 57th Street. Though Baupost offered to invest in 111 West 57th Street, Ambase Corp. refused the capital infusion. 


Related Articles

arrow_forward_ios
Quarters CEO Rui Barros (Linkedin)

Quarters, the “WeWork of co-living,” files for bankruptcy

Quarters, the “WeWork of co-living,” files for bankruptcy
 Robert Morse, executive chairman of Bridge Investment Group, one of the major Opportunity Zone investors focusing on real estate.  (Bridge, Stanford)

Opportunity Zone investments got a boost in 2020

Opportunity Zone investments got a boost in 2020
333 Johnson Avenue with Royalton Capital’s Jin Lee, Sciame Construction's Frank Sciame and Normandy Real Estate Partners' Finn Wentworth (Royalton Capital, Sciame, Normandy)

Normandy sued by former partners for hiding Netflix deal

Normandy sued by former partners for hiding Netflix deal
Union Square Park to gain 2 acres in $100M plan (Getty_

Union Square Park to gain 2 acres in $100M plan

Union Square Park to gain 2 acres in $100M plan
Fabric co-founder, CEO Elram Goren (Getty, Elram Goren via LinkedIn)

Startup wants to bring “micro-warehouses” to vacant retail

Startup wants to bring “micro-warehouses” to vacant retail
Security around Trump Tower to be reduced after 45th POTUS leaves office. (Getty, The Trump Organization)

Fifth Avenue will look different after Trump leaves office

Fifth Avenue will look different after Trump leaves office
(Getty, iStock)

Booster shot: NYC real estate sees salvation in vaccine

Booster shot: NYC real estate sees salvation in vaccine
Joan Collins and 110 East 57th Street #8EFG (Getty, BHS)

Soap star Joan Collins lists longtime Midtown pied-à-terre

Soap star Joan Collins lists longtime Midtown pied-à-terre
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...