General Investment and Development Companies and Henley Holding Company, the partners behind a proposed three-building luxury residential project in the Upper West Side, have just closed the largest residential construction financing deal in the city this year. The firms received a $2.2 construction billion loan for Waterline Square, a 1,132-unit project along the Hudson River.
The financing package is partly made up of equity investments from GID and Henley, which is a subsidiary of the United Arab Emirates sovereign wealth fund Abu Dhabi Investment Authority. More than half of the total, $1.243 billion, came from Wells Fargo, HSBC Bank, JP Morgan and the National Bank of Abu Dhabi.
“We are extremely pleased to have closed on this sophisticated transaction with the most highly regarded investment partners and real estate lending institutions in the world,” said James Linsley, the President of GID Development Group. “This financing package reaffirms our confidence in this unique Manhattan waterfront development and our design and development team’s ability to create the most innovative, comprehensive, and cohesive residential experience in New York City. The combination of amazing location, unprecedented amenity program, new park and open spaces, outstanding views, along with a collection of three of the world’s most celebrated architects will position Waterline Square at the forefront of New York City’s truly great development endeavors and luxury residential offerings.”
The deal is unusual because it comes at a time when lenders have mostly retreated from luxury residential projects. This is due to a softening at the top of the market. According to Olshan Realty, contracts signed for homes that cost $10 million or more dropped by 18 percent to 107 units.
“Wells Fargo has a strong commitment to financing multifamily and affordable housing across the country,” said Kimberly Dail, a senior vice president at Wells Fargo Commercial Real Estate. “Waterline Square is an iconic development in New York’s Upper West Side that encompasses both of these asset classes, and we are proud to finance the construction and serve as lead arranger for this transaction, in support of our customers, General Investment and Development Company and Henley Holding Company.”
The three buildings in the Waterline Square complex are located at 400 West 61st Street, 10 Riverside Boulevard and 639 West 59th Street. GID bought the properties from Extell Development for $676 million in December of last year. The largest piece of the assemblage is Two Waterline Square at 400 West 61st Street. The property will consist of two towers and will contain 656 units.
The complex will also contain more than 100,000 square feet of amenities, which includes a park. The buildings were designed by Richard Meier & Partners Architects, Viñoly Architects, and Kohn Pedersen Fox Associates. GID and Henley expect to launch sales by early next year.
Wells Fargo was the administrative agent in the transaction. Meanwhile, HFF served as an adviser for the financing arrangement.