$2.5B TSX Broadway Update: Full Funding, January Groundbreaking
By: Kim Slowey
Developers of the $2.5 billion TSX Broadway project in New York City's Times Square announced that the development has been fully funded and is on target for a January 2019 groundbreaking.
Investment banking company UBS led a recent round of equity investments for the 46-story tower totaling more than $780 million. Developers L&L Holding Co., Maefield Development and Fortress Investment Group said that total equity in the project is now more than $1 billion. Goldman Sachs provided the balance of financing through a $1.1 billion construction loan.
Project officials said the TSX Broadway development will be the only full-building promotional platform in the U.S. and that, with state-of-the-art signage and the only permanent outdoor stage in Times Square, it will usher in a “new era” of retail, advertising and marketing. “Times Square is the most important urban space in America,” said Mark Siffin, chairman and CEO of Maefield Development.
A volatile stock market and uncertainty about the U.S. economy, according to Reuters, has caused some in the banking industry, particularly regional banks, to “pull back” slightly on riskier loans like those for construction, even though experts told Reuters there’s nothing in the cards that indicates a recession on the scale of what hit the U.S. economy in 2007.
But using the TSX deal as an example, it looks like banks and investors are more than willing to bet on great locations and on developers with solid track records.
Near the end of last month, Related Cos., developer of the $25 million Hudson Yards project in Manhattan, scored a $630 million construction loan from Deutsche Bank for a $1 billion mixed-use development in downtown Los Angeles. AECOM will act as general contractor on the project, which will include 215,000 square feet of retail, a movie theater, public plaza, 10-story Equinox Hotel and 39-story residential tower.
SL Green, developer of the $3 billion One Vanderbilt tower next to Grand Central Station in New York City, also recently announced that it had secured a $225 million construction for a 10-story, 260,000-square-foot mixed-use rental apartment tower in Manhattan. The lenders on that deal are United Overseas Bank based in Singapore, and German bank Helaba, according to The Real Deal.