Prominent N.Y. Skyscraper Secures Nearly $1.3B Loan

Fri July 03, 2009 - Northeast Edition
Jennifer Peltz - Associated Press




NEW YORK (AP) Developers of one of the city’s tallest new skyscrapers said June 26 they had lined up a nearly $1.3 billion loan, sealing what experts called one of the biggest real estate financing deals since the economic crisis began last fall.

Coming amid the worst commercial real estate market in decades, the refinancing package for the Bank of America tower drew congratulations from Mayor Michael Bloomberg and Gov. David Paterson.

“When you have a transaction that has this many zeroes after it, people take notice,’’ said Dennis M. Sughrue, a real estate attorney of Herrick, Feinstein LLP, which wasn’t involved in the deal. “It’s a singular building and a singular transaction, but it is a note of hope for a real estate market which is flat on its back.’’

The 945-ft. (288 m) tower in midtown Manhattan is partially occupied and is set to be finished next year.

The glass-covered skyscraper boasts a prominent location off Bryant Park and a roster of green features that drew Al Gore’s environmentally friendly investment firm.

The building’s developer, The Durst Organization, said 98 percent of it has been leased — about 80 percent to Bank of America Corp.

Despite those attributes, it took about nine months to line up the new financing, Durst spokesman Jordan Barowitz said. The money will pay off a construction loan that came due last month [May] and finance the remaining work, among other things, he said.

Approximately half the new loan for the Bank of America tower comes from the bank itself, Barowitz said. The Charlotte, North Carolina-based bank declined to comment on the refinancing. Four other banks also are involved.

The project’s original financing included $650 million in tax-exempt bonds intended to help spur construction in lower Manhattan after the Sept. 11, 2001, terrorist attacks.