- Builder obtains $500 million to build One Manhattan Square
- Extends Central Park Tower funding deadline to July 31
Luxury-condo builder Extell Development Co. said it obtained a construction loan for a lower Manhattan project after months of delays, and bought more time to get financing for a planned tower on Billionaires’ Row in Midtown.
Extell got a $500 million loan for its One Manhattan Square development from a consortium of lenders including Deutsche Bank AG, Commercial Bank of China and Natixis Real Estate Capital, according to filings Thursday on the Tel Aviv Stock Exchange, where the New York-based company sells debt to investors. The loan could grow to $750 million within nine months, according to the documents, written in Hebrew.
In a separate filing, Extell said its deadline to find financing for Central Park Tower, a planned $3 billion skyscraper on West 57th Street, was extended to July 31 from May 24. The timeline is critical, according to terms of a joint-venture agreement it signed last month with China’s SMI USA. If Extell fails to get a loan by the deadline, SMI can require the builder to buy out its stake in the partnership -- about $300 million -- with interest. And if Extell fails to do that, SMI can push the developer to sell the entire project.
Extell President Gary Barnett didn’t immediately respond to an e-mail seeking comment.
The company’s Israeli investors reacted positively to the news. Extell’s 4.65 percent bonds due in 2019 jumped 3.2 percent to 87 agorot at the close of trading in Tel Aviv. The yield dropped 1.23 percentage points to 10 percent.
Extell, which ushered in Manhattan’s luxury-condo boom with the construction of the One57 skyscraper across from Carnegie Hall, is now getting caught up in its aftermath. The market for high-end homes is slowing as inventory swells and demand from ultra-wealthy buyers cools amid so much competition. That has made construction loans increasingly hard to get, as lenders shy away from funding potentially risky projects.
The loan for the 815-unit One Manhattan Square, on South Street, means Extell can complete a separate financing agreement with office landlord RXR Realty LLC to build the tower. RXR will commit $300 million toward the project, and choose within 120 days of the deal closing whether it wants to add an additional $163.2 million, according to filings in Israel last month. RXR had initially pledged $463.2 million in March, but reduced its commitment after Extell’s delay in getting a construction loan.
Extell said it is missing only one signature to complete the deal with RXR, according to Thursday’s filing.