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High Line site developer close to nabbing $500M loan

A partnership between landlord SL Green Realty Corp. and JPMorgan Chase is exploring a deal to finance one of the most expensive residential development sites ever purchased in the city.

The firms are in talks to provide a mortgage for HFZ Capital Group’s $870 million acquisition of a large lot near the High Line that can accommodate up to 700,000 square feet of residential and mixed-use development. Sources estimate the loan could be about $500 million.

HFZ reached a deal to buy the site, which encompasses the full block between West 17th and West 18th streets from 11th Avenue to the High Line, late last year for about $1,100 per square foot, making it among the most expensive development parcels ever sold in the city.

SL Green, JPMorgan Chase and HFZ did not immediately respond to a request for comment.

HFZ, which has built a number of residential projects in the neighborhood, has spent recent months trying to raise the necessary capital to close on the acquisition. Among the challenges it has faced are growing concerns over whether there is a big enough market of ultra-wealthy buyers for the huge pipeline of exorbitantly priced condos that will be for sale in the coming years.

Last month, HFZ unveiled plans to build a pair of 400-foot-tall condo towers that would feature exclusive amenities like a private driveway for residents. The project could have retail space and a hotel as well. The developer is in the process of arranging several mezzanine loans to complete that purchase, sources say.

Earlier this month, HFZ completed another large deal, buying the residential portion of the Belnord for $575 million from Extell Development.

In addition to being one of the city’s largest commercial landlords, SL Green has operated a busy lending business. It provided a portion of the loan for real estate investor Joe Chetrit’s acquisition of the Sony Building on Madison Avenue for $1.1 billion two years ago. Mr. Chetrit is planning to convert that office property into high-end condos and a hotel, including a penthouse unit asking a record $150 million.

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http://www.crainsnewyork.com/article...bing-500m-loan