Extell secures $168M in EB-5 funds for Central Park Tower; project’s completion date pushed back

Barnett's firm still seeking $900M construction loan

From left: Central Park Tower, Gary Barnett and One Manhattan Square
From left: Central Park Tower, Gary Barnett and One Manhattan Square

In a call to Israeli bondholders Wednesday, Extell Development’s Gary Barnett reported that his firm had secured $168 million in EB-5 funds for Central Park Tower, the supertall condominium project set to rise on Billionaires’ Row.

Up to $340 million in EB-5 funds may be raised for the 95-story tower at 225 West 57th Street, Extell’s filings on the Israeli stock exchange show. The $168 million brings Barnett one step closer to procuring the $1.2 billion needed to complete the project. According to an agreement with Shanghai Municipal Investment, which invested $300 million in the project in May, Barnett must procure the funding by December 2017.  Extell is still searching for a $900 million construction loan.

Since 2014, Extell has spent $939 million on the tower in construction, acquisition, and financing costs, close to $300 million of which were incurred in 2016, the filings show. The $4.4 billion sellout remains unchanged, while the completion date has been pushed back a year to November 2020, according to the year-end report.

The seven-story Nordstrom store at the base of the building is now complete, and construction has started on the residential floors above. Nordstrom’s contribution to the project increased to $426 million from $394 million, of which the retailer has paid $201 million. Nordstrom retains a put option on its investment if the store is not delivered by December 2018.

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Barnett discussed the eventful and oftentimes harrowing year for his firm, reviewing the progress of both CPT and One Manhattan Square, his 815-unit project on the Lower East Side.

One Manhattan Square became fully funded as of January 2017, and 50 of the building’s 80 stories are complete. The financing includes $463 million from RXR Realty, and $125 million in Eb-5 funding, the filings show.

The two series of Extell bonds, which soared to 14 and 15 percent yields in May, have recovered. With current yields at just over 9 percent, however, they still reflect a measure of risk to bondholders.

Last week, The Real Deal sat down with Barnett to discuss the two projects as well as Extell’s plans for the year.

(To see a selection from our database of other properties owned by Extell Development, click here)

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