After closing over a hundred units at One Manhattan Square since March, Gary Barnett’s Extell Development has secured $690 million in new financing for the remainder of the 80-story, 815-unit Two Bridges condo tower.
The new debt consists of a $553.5 million senior inventory loan and a $138.2 million mezzanine loan, according to a disclosure filed with the Tel Aviv Stock Exchange on Thursday. Though the deal has yet to be recorded in city property records, a spokesperson for Extell said that Blackstone Group was the lender.
About $560 million of the loan proceeds will be used to retire the prior $750 million construction loan, which was provided in 2016 by a consortium led by Deutsche Bank, Bank of China and Natixis. That will free up $180 million in unit sales proceeds which were held in a deposit as part of the construction loan agreement.
Those funds, in addition to the remainder of the loan proceeds, will then be used to pay down part of a $463.2 million mezzanine loan provided by Scott Rechler’s RXR Realty, which covers not only One Manhattan Square but also two rental projects at 555 Tenth Avenue and 510 East 14th Street, both of which were completed last year.
The new loans both carry an interest rate of LIBOR plus 4 percent, and a term of 36 months, according to the disclosure on TASE.
The One Manhattan Square project includes an affordable building at 229 Cherry Street which opened last year, while the condo tower has an address of 250 South Street. Closings began in March, and city property records show that 173 units worth $291 million have closed as of Thursday — a rate of slightly less than one unit per day.
In April, Extell said it will waive common charges for up to a decade at One Manhattan Square to spur sales, one of the most extreme buyer incentives the New York market has seen this cycle.
The project, which was heavily marketed towards Asian investors, also includes a significant chunk of EB-5 financing in its complicated capital stack. TASE filings show that Extell had raised $222.5 million in EB-5 funding for One Manhattan Square as of June 30, and 283 EB-5 investors had been accepted into the program as a result.