Fortress Investment Group Takes Reins at Stalled FiDi Condo Tower: Updated
Fortress Investment Group will take control of the troubled supertall condominium tower at 125 Greenwich Street, according to property records made public Monday and sources familiar with the transaction.
The developer invested $285 million in equity to score the deed to the 71-story building, according to the source. PincusCo Media first reported news of the transaction.
Fortress and its joint venture partner Bizzi & Partners Development also landed $313 million in new financing: $220 million in note-on-note financing from Madison Realty Capital and $93 million from Northwind Group, the source said, adding that the debt will both retire previous financing on the project and restart the long-stalled project’s construction. Fortress’ equity investment will cover construction costs on the building, closing fees and interest on the debt it held on the property, said the source.
The Real Deal first reported news of the financing.
Fortress’ deal pays down at least $187 million in debt from Singapore-based construction lender United Overseas Bank, which threatened to foreclose on the property in 2019 after it claimed the developers of the tower failed to pay their construction contractors. That same year, United Overseas Bank sold the debt on the building to BH3, then Fortress picked it up, TRD reported.
The deal for the Rafael Viñoly-designed building also repaid $102 million in debt held by Chinese private equity firm Cindat, according to property records.
Bizzi bought the Financial District asset in 2014 for $183.9 million, and struck a deal to develop the 273-unit luxury condo tower with Cindat, Carlton Group and Howard Lorber’s New Valley. The group broke ground on the property in 2017 and launched condo sales with mixed results, Commercial Observer previously reported.
While the developers managed to score a $473 million construction package from a handful of Asian lenders in 2018, the project stalled in March 2019 after its funders declined to supply more cash to finish the tower amid its lackluster sales, CO reported. Fortress first got involved in the property at the corner of Greenwich and Thames streets in 2020, when it stopped BH3 from foreclosing on the building by purchasing its debt, TRD reported.
Bizzi remains a co-sponsor in the project, according to a spokesperson for the firm. The spokesperson did not disclose the size of its ownership stake.
Representatives for Fortress and Northwind did not respond to requests for comment. Walker & Dunlop’s Aaron Appel and Keith Kurland, who arranged the Northwind debt financing, did not respond to requests for comment. It’s unclear who brokered the sale.
Update: This story has been updated to clarify that Bizzi is still a co-sponsor in the project, details on Madison Realty Capital’s involvement in the financing and the amount of equity Fortress invested.
Celia Young can be reached at firstname.lastname@example.org.