NEW YORK CITY—BLDG Management Co. has secured a $254 million construction-to-perm financing facility from the Bank of China, New York branch, for the construction of 222 E. 44th St. Arranged by Greystone Bassuk, the funds will prompt the building of a multifamily rental and retail building in Midtown East.
Greystone's Drew Fletcher, EVP, led the marketing of the transaction, with support from Matthew Klauer, director and VP Evelyn Savino. The facility was structured as a letter of credit providing credit enhancement to support tax-exempt and taxable variable-rate bonds issued under the NYS Housing Finance Agency's 80/20 Housing Program. The financing consists of $26 million of 2015 Series A tax-exempt bonds; $23 million of 2016 Series A tax-exempt bonds; $125 million of 2016 Series B taxable bonds and nearly $77 million of 2017 Series A taxable bonds.
The facility included several features that are atypical in "80/20" deals. For example, Bank of China provided a 10-year, fully-underwritten commitment for the entire facility (structured as an initial 4-year term, plus a 6-year extension option) on a fully “non-recourse” basis. The facility also included 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.
Notes Fletcher, “While Bank of China is a relatively new player in the "80/20" space, their long-term orientation and emphasis on sponsorship made them an ideal partner for BLDG and allowed them to deliver a superior execution."
The project is on a through-block site extending from 43rd Street to 44th Street between 2nd Avenue and 3rd Avenue in a centrally located and underserved residential submarket of Midtown East. The project will consist of a 43-story high-rise multifamily residential apartment tower with ground floor retail and a multi-level parking garage. The building will have approximately 441,000 square feet and 429 residential rental units, of which 87 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 342 apartments will be leased at market rents.
Says Greystone CEO Richard Bassuk, "BLDG's project is timed perfectly to satisfy the growing need for full-service luxury rental product in a highly convenient, yet underserved submarket of Midtown East."
Adds Fletcher, "BLDG's patience and long-term vision has allowed it to unlock tremendous value in an underutilized asset by converting a former commercial office building into a first-class multifamily rental property."
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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.
