NEW YORK CITY—GlobeSt.com has confirmed published reports that Ziel Feldman's HFZ Capital Group has secured $1 billion in financing for an $870-million High Line development site, allowing the firm to close on the project, located at 518 W. 18th St.
The financing was provided by “a consortium that included Blackrock and SL Green,” Howard Michaels, chairman, the Carlton Group—which represented HFZ in the transaction—tells GlobeSt.com. “There was foreign interest as well, with some overseas buyers invested in institutational funds joining the consortium on this project.”
HFZ also was represented by a Mayer Brown legal team that was led by real estate partner Bob Koen and included real estate partners Marc Shapiro and Jill Block, counsel Jason Schlessel, associates Sean Garahan, Ahmad Nofal and Matthew Johnson,restructuring, bankruptcy & insolvency counsel Richard Ziegler and tax transactions & consulting partner Lee Morlock.
JP Morgan Chase Bank also is an investor. The law firm of Morrison & Foerster represented the bank in the financing. The real estate finance group at MoFo documented the entire $700million capital stack, which JPM sold off to the other lenders, according to a spokesman. MoFo guided JPMorgan through the various structuring, intercreditor and funding issues.
“The project is the best development site in the city; it's huge,” Michaels tells GlobeSt.com. “Most of the new developments are very tall, skinny buildings but with this large development site, you can have great design, light and air. It will provide those who live there with a tremendous living experience.”
Referred to by HFZ as 76 Eleventh Ave., the project is comprised of four buildings totaling 750 units, Feldman shared earlier this year at a presentation before the Young Men's/Young Women's Real Estate Association. Feldman is aiming to make the apartments “affordable luxury,” he said. HFZ reached an agreement to buy the site, located between Eleventh avenue and the High Line, in 2014.
In addition to covering the purchase price for 518 W. 18th St., the capital raise will fund other pre-development expenses. Approximately 70% of the financing package is a loan and the rest equity. The financing will allow the developer to close on one of the most expensive development acquisitions ever recorded in New York, at $1,100 per square foot, according to the Real Deal.
“We have a unique opportunity at 76 Eleventh Ave. to develop an architecturally significant project with unparalleled views of the river and the skyline of New York,” Feldman says.
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Rayna Katz
Rayna Katz is a seasoned business journalist whose extensive experience includes coverage of the lodging sector, travel and the culinary space. She was most recently content director for a business-to-business publisher, overseeing four publications. While at Meeting News, a travel trade publication, she received a Best Reporting award for a story on meeting cancellations in New Orleans during Hurricane Katrina.
