Posted Oct 23, 2014, 12:17 PM
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Location: Borough of Jersey
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https://www.cmalert.com/search.pl?ARTICLE=160584
Bank of China Backing Big NY Rental Project
October 17, 2014
Quote:
Bank of China has agreed to provide a $480 million letter of credit as a backstop to tax-exempt bonds that will finance construction of an apartment complex on Manhattan’s West Side.
Brookfield Properties plans to use proceeds from the municipal-bond issue to build a 64-story tower with 790 units, as part of its Manhattan West mixed-use project. The agreement with Bank of China will provide credit enhancement for the bonds. The deal is expected to close in conjunction with the sale of the securities, probably sometime next month.
The apartment building, at 401 West 31st Street, likely will be the first component to be completed at Manhattan West. Brookfield plans a 7 million-square-foot complex encompassing several office and residential buildings, retail space and parkland, constructed on a massive platform over rail lines spanning West 31st and West 33rd Streets at Ninth Avenue.
The Bank of China letter of credit is part of a so-called “80/20” financing package for the rental property. Under a program administered by New York State, multi-family developers may obtain primary financing via a tax-exempt bond issue in return for reserving 20% of a project’s units for low- and moderate-income residents. The letter of credit acts as a guarantee on the bonds, should a developer default.
Brookfield’s project lies within the Hudson Yards redevelopment district. In addition to the New York fund operator’s buildings, other projects in the district are under development by Related Cos. of New York and Oxford Properties, the real estate arm of Ontario Municipal Employees of Toronto.
Bank of China has completed several large debt deals in Manhattan over the past couple of months. For example, it helped finance Ashkenazy Acquisition’s $365 million purchase of Avalon Chrystie Place, a 361-unit luxury apartment building at 229 Chrystie Street. Bank of China originated some $260 million of debt along with a preferred-equity investment. The property includes 72,000 sf of retail space anchored by a Whole Foods grocery store.
The bank also provided the letter of credit backing $539 million of tax-exempt bonds issued in August to finance the development of a 1,174-unit, 60-story tower at 605 West 42nd Street by Moinian Group of New York.
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