Full term 10-year, interest-only loan for 63-unit apartment building on NYC’s Central Park North
Winter & Company was retained for the third time in 25 years to advise the ownership of this three-building, six-story, 63-unit apartment building located on Central Park North facing Manhattan’sCentral Park in connection with obtaining permanent, non-recourse financing.
Challenges and solutions:
One major challenge is that, on the one hand, the borrower wanted a $4,750,000 10-year, fixed rate, interest-only mortgage, while on the other hand, the borrower did not want a balloon loan, and also did not want a loan structured with a defeasance or yield-maintenance pre-payment penalty – preferring instead a loan structure with a total term of 25 years which would amortize (after the initial 10-year i-o period) on a self-liquidating basis. Winter & Company was able to find a way to accommodate this highly-specialized request by arranging the loan with a balance sheet lender that could offer our borrower an additional 15 years of term, on a fully self-liquidating basis, with the interest rate floating at 250 basis points above LIBOR during the last 15 years of the loan term. The borrower did not want a CMBS execution (with its usual severe prepayment penalties), preferring instead to transact with a balance sheet lender. The solution was a highly-customized non-recourse loan structure meeting all of the borrower’s exacting criteria.
The loan was arranged with a low, 10-year fixed interest rate with a balance sheet lenderfor this long-time client. Previously Winter & Company had arranged light rehab financing shortly after the original acquisition and then a decade later W&Co had arranged a construction loan for a full gut-rehab of the entire property including 11 units which had been fire-damaged and off-line since the original acquisition. This resulted in bringing the unit count up from 42 to 63 apartments with considerable rent and NOI growth.