NEW YORK CITY—Greystone Bassuk has closed a $200 million construction-to-perm financing facility.
Led by Wells Fargo Bank with M&T Bank and JP Morgan Chase as co-lenders—for an affiliate of Taconic Investment Partners and its partner, Mitsui Fudosan Americas—the facility was the largest construction financing to be structured entirely as a private placement to date under the NYS Housing Finance Agency's 80/20 Housing program. It also was the first private placement execution with multiple bond purchasers.
The financing consists of $10 million of 2015 Series A low floater tax-exempt bonds; $60 millioin of 2015 Series B taxable bonds, over $55 million of 2016 Series A low-floater tax-exempt bonds and nearly $75 million of 2016 Series B low-floater taxable bonds providing funds for the construction of 525 W. 52nd St.
The project is located on a through-block site extending from 52nd Street to 53rd Street between 10th Avenue and 11th Avenue in a rapidly growing residential section of Midtown West. The project will consist of two luxury residential towers of 14 and 22 stories over a single-story base with a common lobby and ground-floor retail.
The building will contain approximately 445,000 square feet and 392 residential rental units, of which 80 units will be designated as affordable housing units for tenants whose household incomes are at or below 60% of the New York City Area Median Income and the remaining 312 apartments will be leased at market rents.
"Taconic's creativity, patience and long-term vision allowed it to recognize and unlock tremendous value from an underutilized commercial site in a rapidly changing neighborhood,” says Richard Bassuk, CEO.
Adds Drew Fletcher, EVP—who marketed the transaction with support from Greystone Bassuk director Matthew Klauer and VP Evelyn Savino—“Taconic's project will further the expansion and transformation of Midtown West into one of Manhattan's most desirable and vibrant residential neighborhoods."
Charles Bendit, co-founder and CEO of Taconic says, "While we have always maintained deep relationships with our lenders and capital partners, Drew's professionalism, tenacity, and credibility with the lending community enabled us to achieve a financing structure which exceeded our expectations and created significant value for the project and for our partners."
Chris Balestra, SVP of Taconic, adds, "Drew did an exceptional job managing a complicated financing process that continued for more than 16 months and involved several unanticipated challenges—such as the replacement of our equity partner. Greystone Bassuk's deep understanding of the marketplace and ability to drive lender demand were instrumental in delivering a successful execution."
Structured entirely as a private placement, the facility will deliver substantial savings by eliminating remarketing costs and illiquidity risk associated with a typical publicly offered bond transaction. The facility also included an extension option with an earn-out feature to allow the partners to resize the loan and return a portion of the initial equity upon stabilization of the Project.
Adds Fletcher, "The size and complexity of the transaction posed some unique challenges for the financing. Wells Fargo proved to be the ideal partner, and demonstrated a willingness and creativity to structure the transaction in order to meet the needs of the project and the partners."
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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.
