[NYguy]

Also, the air rights from the landmarked church across the street went to 53W53. There is a proposal to allow for broader lamdmark air transfers in Midtown, but this site is just out of reach. And finally, while there is much specilation about the numbers, we just won't know the details until they are released.


https://therealdeal.com/2017/03/16/a...n-the-details/

At 666 Fifth, the devil’s in the details – and the details don’t add up
News reports of Anbang deal at Kushner’s tower leave far too many questions unanswered

By Hiten Samtani and Konrad Putzier
March 16, 2017

....Several market observers, however, told TRD that the numbers, no matter how they’re spun, just don’t make sense. Some even questioned Anbang’s commitment to the property, saying the news reports could serve as a way for Kushner Companies to court other interested investors even if the Chinese insurer walks away.

The investor documents obtained by Bloomberg estimate that the completed redevelopment will be worth $7.2 billion. For the project to pencil out at those numbers – even assuming very rosy projections for the office and retail components – the partnership would have to be underwriting the condos at an average of up to $9,000 per square foot, the developer said. That’s a price not even the most ostentatious of the current crop of buildings has come close to – 432 Park Avenue, for example, was asking an average of $6,894 per square foot, according to an analysis by TRD in January 2014.

....“This [price point] would be an attempt to move Billionaires’ Row onto Fifth Avenue,” said Jonathan Miller, CEO of Miller Samuel.

Another red flag is the size of the construction loan. At $4 billion, it would be many multiples of anything sought for a project of its type. Some of the city’s most prominent residential developers are chasing, with mixed success, construction loans in the $1 billion-range; HFZ Capital’s Ziel Feldman, for example, is in advanced talks with the Children’s Investment Fund to provide a $1.2 billion loan at 76 11th Avenue, while Gary Barnett, who is trying to score a $900 million loan for Central Park Tower, had to refinance existing land loans on the project because he couldn’t find the money in time.

Michael Stoler, who works on financing deals at Madison Realty Capital, called the $4 billion figure at 666 Fifth “crazy” – even if it factors in the $850 million in EB-5 funds that Kushner and Anbang are seeking.

“The only way this type of deal is going to be done is with the Chinese banks and then it’s going to be a structured deal,” he said, speculating that Anbang’s relationship with lenders like the Bank of China or the Industrial and Commercial Bank of China could help attract the needed funds. CMBS lenders have largely stopped doing construction loans, and banks balk at putting this much risk on their balance sheets.

“I could not see an American bank going into this type of deal,” he said.

Related Companies and Oxford Properties Group have landed around $5 billion in construction financing for an office tower at 30 Hudson Yards and the project’s nearby retail component, but the package was made up of smaller individual loans and involved a handful of owner-occupied office condo deals.

Related is now in the market for a $2.56 billion loan to fund an office tower 50 Hudson Yards (projected total cost: $4 billion), and SL Green Realty last year landed a $1.5 billion loan from a syndicate of banks to fund the construction of its Midtown East office project One Vanderbilt.

....Bistricer argued that 666 Fifth’s smaller floor plates near the top lend themselves to a condo conversion. “There’s lot of light up there, it’s a great block,” he said. “You can make it work.”
Kushner Companies and Anbang are also looking to turn several lower floors into retail space, according to the New York Post.

Sources told TRD that Kushner Companies was in talks with Spanish billionaire Armancio Ortega, whose company Inditex (parent to retail giant Zara) owns a large retail condo at the property, to partner with them on revamping the building’s retail and buying out some of the existing tenants.

“The amount of money they have to pay to buy out existing tenants is astronomical,” said one developer who’d heard about discussions at the property. “Which what is driving the cap stack so high.”