Blackstone to Finance $1.2B Luxury Towers on NYC Waterfront

Blackstone will provide $322M in financing for a $1.25B luxury residential development with two apartment towers that will be built on the NYC waterfront at 570 Washington Street by a joint venture of Zeckendorf Development, Atlas Capital Group and The Baupost Group.

According to a report in the NY Post, Newmark’s Debt & Equity unit arranged the financing from Blackstone, which will fund the land acquisition and pre-development work on the project. 

The brokerage, which has been growing its equity business by focusing on large JV deals in NYC, also facilitated the trio’s joint venture with more than $400M of equity.

The partners will build two luxury condominium apartment towers—the tallest rising 450 feet—overlooking the Hudson River on a 1.3-acre empty lot adjacent to NYC’s West Side Highway. The development encompasses an entire city block and is next door to Google’s new 1.7M SF St. John’s Terminal campus in Lower Manhattan.

“[The developers] are well-positioned to deliver a unique, high-quality project that will benefit from the continued growth of the West Side of Manhattan,” said Michael Eglit, head of US originations for Blackstone Real Estate Debt Strategies, in a statement.

Atlas Capital led a rezoning effort for the area that began in 2013 and culminated in the rezoning of a four-block site that became the Google campus and included a $100M payment to the Hudson River Park Trust in exchange for unused air rights.

Based on the zoning changes, the 1.3-acre site for the project led by Zeckendorf permits the development of more than 600K SF of residential and mixed-use space.

Zeckendorf and Atlas purchased the 570 Washington site from Westbrook Properties from Westbrook Partners for $350M in a deal that closed in February. In an arrangement brokered by Newmark, Boston-based Baupost agreed to join the joint venture two weeks ago.

In April, Google closed on a deal with Oxford Properties to purchase St. John’s Terminal for $2.1B. The Terminal, located at 550 Washington Street in a neighborhood known as Hudson Square, is being combined with adjacent properties at 315 Hudson Street and 345 Hudson Street to form the new 1.7M SF campus for the tech giant.

According to a report in NY YIMBY, the campus space in the two Hudson Street buildings have been completed. The St. John’s Terminal building is expected to open by the middle of the next year when the campus will become the NYC headquarters for Google’s Global Business Organization.

Oxford Properties Group purchased the 3.25-acre St. John’s Terminal site, which includes 600 feet of Hudson River frontage, from Westbrook Partners and Atlas Capital Group for $700M in 2018.

St. John’s Terminal was built in 1934 by the New York Central Railroad as a terminus of the High Line, an elevated freight line along Manhattan’s West Side. As redeveloped by Oxford, the Terminal features large landscaped terraces that surround the perimeters of the fourth floor and each level above the tenth floor, permitting Google to occupy what is known as a “biophilic office community.”