Related Companies and Oxford Properties Group closed on a $1.3 billion financing package for 15 Hudson Yards yesterday.
The finance package includes equity provided by Related, Oxford and a sovereign wealth fund, tax-exempt bonds from New York State Housing Finance Agency and an $850 million construction loan provided by London-based The Children’s Investment Fund.
The Real Deal reported in September that Children’s Investment Fund had provided $850 million toward the residential condominium portion of the building, which has an official address of 553 West 30th Street between 10th and 11th Avenues. The tax-exempt bonds provided by HFA were sold to an undisclosed buyer.
Construction has already begun on the 960,000-square-foot tower, which will have 285 condo units and 106 affordable rental apartments. The building will effectively straddle the High Line and will be attached to the Culture Shed—an indoor/outdoor venue that will eventually host New York Fashion Week. Work is expected to be completed in 2018, and the developers will start selling units next year, according to the release provided by the developers.
“Hudson Yards is transforming the west side of Manhattan and this latest transaction represents a continued show of confidence from elite investors and lenders,” Related’s Chief Executive Officer Jeff Blau said in the release. “We have already attracted business leaders in finance, fashion, beauty, consulting, law, tech and media to Hudson Yards; and in just a few short years we will welcome our first residents to the new neighborhood.”
The 910-foot tower is the first of two residential buildings that Related and Oxford are developing over the eastern rail yards. The second is the 1,000-foot tall 35 Hudson Yards. The 70-story building will have condo units, and will be anchored by a luxury hotel operated by Equinox Fitness.
The developers have received funding from a wide pool of global investors for the 17-million-square-foot Hudson Yards development. Deutsche Bank and Bank of China are co-leading a $1.5 billion loan for construction of the Shops & Restaurants at Hudson Yards, the retail component of the project, as CO previously reported. Work on the 1-million-square-foot shopping center’s frame is well underway with several levels of steel already up. The mall will be anchored by a three-level Neiman Marcus, the store’s first location within the five boroughs.
Related and Oxford have had to change their strategy when it comes to securing the massive amounts of steel for the project. Mr. Blau said in April that the developers were buying steel directly from producers around the world to meet the demands of the colossal development.
In an one-on-one interview with CO earlier this month, Jennifer Tuhy, the chief financial officer for Related Hudson Yards, said steel has been the biggest construction cost throughout the project.
“We spend a lot of time managing [construction costs],” Ms. Tuhy said. “Much more so with something like steel, where we need to make sure that it’s fabricated and brought here on time.”
A representative for Children’s Investment Fund did not immediately return a request for comment.