Meritz Real Estate underwrites $53 mn debt on luxury high rise in Manhattan

  • 2017-12-22

Meritz Real Estate Asset Management Co. Ltd. has underwritten five-year senior debt of 57.5 billion won ($53 million) secured on a super-luxury, 131-story building under construction in Manhattan, expanding its portfolio into mixed-use properties in global gateway cities.

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The debt is part of $900 million senior notes for $3.2 billion debt financing raised for the property, with JPMorgan acting as a lead manager, South Korean news outlet Financial News reported on Dec. 20.

A senior Meritz source confirmed the report.

The senior debt, which can be extended by one year, carries an interest rate of around 6% per annum, or 4.5% points plus the LIBOR rate. Its expected IRR is 6.5%.

Extell Development, a New York-based real estate developer, takes charge of the construction. It has invested $1.2 billion in an equity stake in the property, according to the report.

The building at 57th Street, believed to be Central Park Tower, is set to be the tallest residential tower in the West, the second tallest after the World Trade Center in New York City.

With a floor space of 110,238 square meters, it is scheduled to be built by 2020. It is in the proximity of the Central Park and surrounded by super-luxury condominiums.

Nordstrom, a department store chain, will open its first store in Manhattan in the base of the skyscraper which will have 179 housing units.

For the debt underwriting, Meritz Real Estate launched a domestic fund.

Founded in early 2016 as a wholly-owned unit of South Korea’s Meritz Financial Group, it is headed by Chief Executive Jun Hyun Shin. He had worked for Hyundai Asset Management and Hana Asset Management with a master’s degree in construction management of Stanford University.

Former global real estate professionals from Hyundai Asset joined Meritz, alongside Shin.

The company will have raised a combined 1 trillion won in real estate investment funds since its inception, including the new one for the Manhattan skyscraper.

Earlier this year, it underwrote around 260 billion won of 10-year mezzanine debt secured by 245 Park Avenue in Manhattan. The note was originated by JPMorgan.

<Edited by Yeonhee Kim>