Eichner Lands $420 Million to Build NYC Condo For Super-Rich
by Eliot Brown
Ian Bruce Eichner’s comeback is gathering steam.
A photo shot in 2013 of the site purchased by Mr. Eichner for a condo development.
Eliot Brown / Wall Street Journal
The New York developer, who suffered high-profile failures in two real estate busts, late last week secured $420 million in financing for a nearly 800-foot condo tower just south of Madison Square Park in Manhattan, according to multiple people familiar with the financing.
The commitments – including more than $340 million from a Goldman Sachs Group debt fund and more than $80 million in preferred equity from Dune Real Estate Partners and Fortress Investment Group — give the planned glassy tower the funding to be completed, these people said.
The deal marks a remarkable turn for Mr. Eichner, who became an early face of the last real estate bust when his planned $4 billion Cosmopolitan of Las Vegas resort casino stalled amid a credit crunch. After he was unable to refinance a loan, he surrendered the development to Deutsche Bank, which completed it and sold it to Blackstone Group earlier this year.
During the real estate bust of the 1990s, he defaulted on a loan financing a flashy office tower. Because of his history some lenders have avoided Mr. Eichner.
Still, Mr. Eichner’s backers point out that he has had some big successes in his career, including a 530-unit condo project tower in South Beach. Some lenders view him as a skilled builder who has been the victim of poor timing.
The deal for the tower at 45 East 22nd Street is the latest luxury condo tower to get financed in New York, joining a string of towers that have been selling units for well over $3,000 per square foot, a sum considered eye-popping just a few years ago. An influx of foreign buyers and growing ranks of the wealthy have helped propel the market, which, in turn, has pushed up the price of land throughout Manhattan.
Of course, many wonder how much depth there is to the pool of super-wealthy condo buyers. A slowdown in the sales at Gary Barnett’s One57 turned heads when it was reported in last month.
Mr. Eichner’s project, however, has some advantages. It has a lower land cost than many projects being planned today, given that he struck his deals to buy the land well over a year ago, when land was cheaper. In addition, few other large developments sit near Madison Square Park.
Construction has already begun, and the project even has a preliminary website. Sales are expected to begin later this fall.
The funding came together more than a year after Mr. Eichner bought the land. The backers all have extensive New York condo experience. Goldman, for instance, was the main investor in the successful 15 Central Park West condo project through a private equity fund, while Dune is an investor in 56 Leonard St. in Tribeca, which is nearly sold out.