Developer Bruce Ratner is moving closer to building his Frank Gehry-designed 76-story tower in Lower Manhattan, as his Forest City Ratner has secured $680 million in financing for the project. The 904-unit apartment building on Beekman and William streets, is slated to start major construction next week, according to Forest City.
Update 5:45 p.m.
The tower, where not much activity has been going on until now, has been the subject of much interest from local residents and Assembly Speaker Sheldon Silver, who wrote a letter to Forest City Ratner recently asking for an updated construction schedule given that Forest City had previously said a school would be open by 2009. Now, Forest City spokesman Loren Riegelhaupt confirmed, the school is slated to open in 2010.
Forest City Closes on $680 Million Financing for
Lower Manhattan Development
Construction Loan for Frank Gehry-Designed Beekman Project is
Largest in Company History
BROOKLYN, NEW YORK—Friday, March 28, 2008—Forest City Ratner Companies, a wholly owned subsidiary of Forest City Enterprises, Inc. (NYSE: FCEA and FCEB), announced the closing of $680 million in construction financing for its mixed-use Beekman development in lower Manhattan. The financing—a genuine milestone for both Forest City Ratner and lower Manhattan—is the largest construction loan in Forest City Enterprises’ history.
Bruce Ratner, Chairman and CEO of Forest City Ratner, said, “It is especially gratifying in this economic climate to have leading financial institutions show this kind of confidence in our Beekman project. Beekman, which combines a public school, an ambulatory care center for New York Downtown Hospital, landscaped public plazas, retail space, and Frank Gehry’s first residential building in New York will be a superb addition to lower Manhattan.”
Forest City Enterprises President and CEO, Charles A. Ratner, added, “We’re thrilled to be able to bring another great project to New York, one of our most important core markets. This announcement brings to a total of more than $1 billion the project financings Forest City has completed within just the past 60 days. That’s a reflection of our track record and trust-based relationships with lenders, as well as a testament to the hard work of our entire team.”
“Today’s announcement is testimony to the strength and vitality of the Downtown development market,” stated Lower Manhattan Development Corporation Chairman Avi Schick. “Lower Manhattan has become a 24/7 community and is now the place to live, work and play. This thriving neighborhood not only has world class office space, but also a rich and diverse housing stock, acres of open space, and premier cultural amenities.”
The four lead banks participating in the financing are Eurohypo AG, Europe’s leading international real estate bank which is also acting as Administrative Agent; Nord/LB, an international real estate bank with branches in New York, London, Singapore and Shanghai; ING Real Estate Finance, a subsidiary of one of the world’s largest financial institutions; and Fifth Third Bank, a leading financial institution headquartered in Cincinnati, Ohio. RBS Citizens, N.A. is providing the credit enhancement for the bond issue. The Mezzanine Loan provider for the project is the National Electrical Benefit Fund, which is also Forest City Ratner’s equity partner in the Beekman project.
Andrew Silberfein, Executive Vice President of Finance, led the financing with the six lending institutions. The $680 million in bonds, of which approximately $204 million comes from the New York Liberty Bond Program, are being issued by the New York City Housing Development Corporation.
“While today’s market has made financing large deals very difficult, it has by no means made it impossible and this project is a prime example,” said Ben Marciano, Managing Director, Head of Real Estate Investment Banking – U.S. of Eurohypo AG in North America. “We believe strongly in the Beekman project and FCRC and it was a pleasure working with such a diligent and dedicated group of professionals.”
Major construction on the Beekman project, which will serve as a catalyst in the rejuvenation of its entire lower Manhattan neighborhood, is scheduled to commence next week. Frank Gehry’s final architectural design will be unveiled soon and the building is expected to begin leasing in 2010.
“Today’s closing is a significant step forward for the project and speaks highly of our ability to put together complex financings in today’s market,” said Joanne Minieri, President and COO of FCRC. “We are very pleased to be moving forward and it is a tribute to all of the hard work led by our skilled executive team including Andy Silberfein in Finance, our General Counsel David Berliner, MaryAnne Gilmartin in Development and Bob Sanna in Construction.”
Beekman will be a 76-story tower with approximately 1.1 million square feet, including 904 market-rate apartments, a pre-K through 8th grade public school for 630 students, a 21,000-square-foot ambulatory care center for New York Downtown Hospital, 1,300 square feet of ground-floor retail space, and below-grade parking for 175 cars. The site is adjacent to New York Downtown Hospital on the block bounded by Beekman Street to the south, William Street to the east, and Spruce Street to the north.
“This project could not have happened without the support of Speaker Silver, Mayor Bloomberg, Deputy Mayor Leiber, HPD Commissioner Donovan, NYC HDC President Jahr, LMDC President Emil and Chairman Schick and all of the local community leaders,” expressed Bruce Ratner. “I want to thank them all for their helpful input and guidance and look forward to continuing to work with them as we move forward.”