BLDG , the family real estate investment, development and operating company, has secured $254 million in financing for its first mixed income apartment development.
The company is set to build an 80/20 rental tower on a through-block site from 43rd Street to 44th Street, between 2nd Avenue and 3rd Avenue in Midtown East.
The project will consist of a 43-story high-rise apartment tower on a base with ground floor retail and a multi-level parking garage.
The building will contain 441,000 s/f 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 percent of the New York City Area Median Income (AMI), and the remaining 342 apartments will be leased at market rents.
Greystone Bassuk arranged a $254 million construction-to-perm financing facility with Bank of China, New York Branch, on behalf of BLDG to fund the development.
Lloyd Goldman, president of BLDG, said, “As our first “80/20” project, we knew there would be a learning curve, so it was critical for us to assemble the right team to guide us through the process. Greystone Bassuk provided complete end-to-end co-ordination and management of the entire HFA bond financing process from inducement to closing. Their hands-on approach and deep understanding of the marketplace allowed us to achieve a financing structure and execution for the project that exceeded our expectations.”
Richard Bassuk, chief executive officer, and Drew Fletcher, executive vice president, of Greystone Bassuk, quarterbacked the play to secure $26 million of 2015 Series A tax-exempt bonds; $23.3 million of 2016 Series A tax-exempt bonds; $125 millionof 2016 Series B taxable bonds; and $76.9 million 2017
Series A taxable bonds for the construction of 222 East 44th Street.
Said Bassuk said, “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.”
Fletcher added, “BLDG’s patience and long-term vision has allowed them to unlock tremendous value in an underutilized asset by converting a former commercial office building into a first-class multifamily rental property.”
Fletcher led the marketing of the transaction, with support from Greystone Bassuk Director Matthew Klauer and Vice President Evelyn Savino.
The facility included several unique features not typical in conventional “80/20” deals. For example, Bank of China provided a 10-year fully-underwritten commitment for the entire Facility (structured as an initial four-year term, plus a six-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.
Fletcher commented, “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 new apartment tower will have “high-end condominium quality finishes and … a world-class amenity package,ˮ according to the developer.
