J.P. Morgan, Tyko Capital Provide Nearly $1.2B in Financing for Chelsea Luxury Towers
By Isabelle Durso August 16, 2024 2:09 pm
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J.P. Morgan Chase and Tyko Capital have teamed to provide nearly $1.2 billion in financing for the new owners of the luxury towers at One High Line, a project formerly owned by developer HFZ Capital Group.
Developers Witkoff, Access Industries and Monroe Capital bought the site, formerly known as The XI, out of foreclosure for $900 million in 2021 and are using the lenders’ refinancing to complete the Chelsea towers, which will include luxury condos and a hotel. The deal was arranged by Walker & Dunlop.
Spokespeople for J.P. Morgan, Tyko, Walker & Dunlop and the developers did not immediately respond to requests for comment. Bloomberg first reported the financing.
J.P. Morgan and Tyko’s package — one of the largest for a real estate project this year — comes after the High Line development saw some trouble with its initial owner, HFZ, which paid a considerable $870 million for the property in 2015 under the leadership of Ziel Feldman, Crain’s New York Business previously reported.
However, the project faced multiple snags, causing HFZ’s investment next to the High Line property to run out of funds as construction halted. Plus, a former HFZ managing director was found to have taken bribes from a mob-owned construction company that worked on the project.
Feldman blamed the company’s faults on former HFZ executive Nir Meir. Meir was indicted along with other HFZ executives in February for allegedly stealing at least $86 million in a years-long fraud scheme. HFZ itself pleaded guilty to grand larceny and tax fraud as part of the case in August, but won’t face any fines or punishments, Crain’s reported.
Now, in 2024, One High Line has attracted numerous cash buyers and has more than $800 million in sales as demand for new, high-rate condos in the city remains high.
This comes after Victor Sigoura’s Legion Investment Group bought a nearby 20,000-square-foot empty lot in Chelsea from Casco Development for $87.4 million in April. The firm said it plans to build a 20-story luxury apartment building at the site.
Isabelle Durso can be reached at idurso@commercialobserver.com.
