Developers nab $500M CMBS loan for 3eleven tower in Hudson Yards

Douglaston Development and Ares Management have secured $500 million in CMBS refinancing of 3eleven, their 60-story tower in Hudson Yards.

Goldman Sachs and Wells Fargo are sharing the debt 60-40, respectively, BisNow reported based upon a Kroll Brand analysis. The loan, which has a two-year floating rate and includes three one-year extensions, is expected to close at the end of July.

The loan will allow the developers to pay the $415 million construction loan along with closing costs, fund reserves and an additional $60 million in mezzanine debt. The sponsors will also get back more than $115 million in equity.

The deal will bring the value of the building up to $930 million, almost $1 million per unit.

The tower, which was rezoned from manufacturing to residential, is at 311 11th Avenue on the border of Hudson Yards and Chelsea. It was originally proposed as a 1.1 million-square-foot, two-tower project alongside 606 West 30th Street.

The residential portion has 938 housing units with 235 of them subject to mandatory affordable housing income restrictions. It has 60,000 square feet of amenity space, including a fitness center, music rooms, pet grooming facilities, outdoor pool and co-working space.

There is also 12,000 square feet of retail space at the tower’s base, which is 94 percent leased a grocery, according to BisNow. Douglaston told BisNow last year it was marketing the building to employees of Google, Amazon, BlackRock and L’Oreal, who all have offices in the neighborhood.

Douglaston just picked up another property on the Upper East Side, a 90-unit rental building at 1450 Third Avenue for $115 million with a $270 loan package from BDT & MSD Partners. The developer plans to knock down part of it and put up a 39-story, 478-foot-tall building with 72 units at 175 East 82nd Street.

— Christina Previte

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