Posted Dec 27, 2010, 3:13 PM
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New Yorker for life
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Join Date: Jul 2001
Location: Borough of Jersey
Posts: 52,728
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^ That should read "streetwall", but oh well.
Meanwhile, Barnett tries his method again...
http://online.wsj.com/article/SB1000...googlenews_wsj
Risky Venture in Diamond District
By ELIOT BROWN
December 27, 2010
Quote:
At a time when banks are reticent to finance any new buildings in the city, real-estate firm Extell Development says it will begin work on its planned 34-story International Gem Tower office building in Midtown even without a loan to finance its construction.
Developers rarely build without loans to finance construction given the high costs and risks. Banks have been particularly cautious in making such loans in the past three years, requiring landlords to have tenants committed to lease major portions of buildings at healthy rents.
Raizy Haas, a vice president at Extell in charge of the project, described the decision to move ahead as a "calculated risk," one that the firm's equity partners had agreed to fund.
Compared with typical buildings that begin construction in tough markets, that commitment level is low.
"At some point in the process, we're going to go to the banks and get a construction loan," she says. "But being able to have the commitment from the equity partners allows us to go ahead even without construction."
The pledges of new construction reflect the unorthodox style of Extell, led by Gary Barnett, a onetime diamond trader who is building at a time when many developers believe conditions are far too inclement to justify new construction. This summer, Mr. Barnett began work on a 1,000-foot high-end residential and hotel tower across from Carnegie Hall without a construction loan. He said Abu Dhabi-based Aabar Investment was funding much of the equity for the tower.
Other than that project, now rising a few stories above street-level, there has been a drought of new construction of large projects in the city since the recession hit.
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