Equicap has arranged arranged $18 million on construction financing for a foreign developer.
Daniel Hilpert, managing director at Equicap, announce that the loan, arranged through a bank, will finance the development of a condo development on the Upper East Side.
“Many banks hit the brakes and are out of the construction lending business, especially for ground up condo development,ˮ said Hilper. “The team at Equicap was able to capitalize on our strong banking relationships and arrange a loan at full leverage.ˮ
According to Hilpert, a further challenge was that the proposed development consists of nine large floor-through units.
“Condos over $5 million are reportedly sitting longer on the market and an inventory build up has made many lender nervous, leading to tightened underwriting or turning off the spigot entirely,ˮ added Hilpert.
An additional challenge was that the developer pre-sold the retail to an investor.
“The funding mechanism of the retail condo complicated the transaction,ˮ he said. “Equicap negotiated a holdback to make the lender comfortable that sufficient funds are available if needed. No fees were charged on the holdback.ˮ
Equicap has closed $100 million in small construction loans since the summer and remains very active in the space.