The Real Deal New York

Milstein lends $130M on Seaport site it long owned

Howard Hughes Corporation closed on the $183M purchase of the 1-acre parking lot
By Christian Bautista | June 22, 2018 06:38PM

Howard Milstein and 250 Water Street (Credit: Getty Images and Google Maps)

Milstein Properties is having separation anxiety in South Street Seaport.

The company changed its role at 250 Water Street, a one-acre parking lot and development site that it owned for nearly four decades. The company, which sold the site earlier this month, has gone from owner to lender, originating a $129.7 million loan for Howard Hughes Corporation’s acquisition of the property, according to documents filed with the city on Friday.

The property was sold free of debt, property records show. The site, which offers nearly 290,000 buildable square feet, changed hands in a $182.7 million deal. Its alternate addresses are 304-312 Pearl Street, 2-8 Peck Slip and 116 Beekman Street.

When the sale was announced earlier this month, Howard Hughes disclosed that the deal would include a $53 million initial payment and a mortgage of an unspecified amount. The loan will also have an initial interest-free term of six months followed by three six-month extension options at a 6 percent annual rate.

Milstein bought the property for $5.8 million in 1979.  Over the next few decades, the company offered several proposals for the site. Plans for the site include a two-building complex and a 770,000-square-foot, which generated pushback from the Landmarks Preservation Committee and local residents. Its latest proposal, a 23-story, 450-unit rental building, took a hit after a downzoning in the area.

Howard Hughes is in expansion mode in the Seaport District. The company is already developing Pier 17 and the Tin Building in the area, and is eyeing an extra 600,000 square feet of development rights in the immediate vicinity.

Howard Hughes has yet to reveal its plans for 250 Water Street.