$14,000,000 underlying mortgage for a 306-unit, 24-story Historic Art Deco Cooperative on Manhattan’s Upper West Side
Winter & Company was retained to advise the board of directors of a 24-story, 318-unit cooperative building located on Riverside Drive on Manhattan’s Upper West Side, in connection with this $14 million financing assignment.
The pre-war building, with dramatic views of the Hudson River, which has 306 residential units and 12 commercial units, ultimately decided upon a $12 million mortgage along with a $2 million unsecured line of credit. Thus, the co-op emerged from the refinancing with more than $6 million of surplus cash, which could be devoted to the repairs and capital improvement work at hand.
In this case, timing was critical to identify the correct lender as interest rates had just started to increase, thus the borrower’s ability to lock in the interest rate immediately (upon acceptance of the term sheet) was a very important factor.
The co-op board had realized that it needed to address many important and expensive repairs and capital improvements, and thus needed a substantially larger mortgage in order to address these items, as well as a substantial unsecured line of credit to provide future funding for unforeseen items that might arise in the later years of the loan term. Furthermore, the new financing would need to be structured as an interest-only loan, in order to minimize the impact of a much larger mortgage on each shareholder’s maintenance payments.
The floating rate, unsecured credit line had a term of 10 years with no non-use fees. Another benefit of the unsecured credit line as that no mortgage recording tax was incurred by the co-op on the credit line, thus saving them $56,000 in closing costs.