The developers of new luxury condos in the former Verizon building on 50th Street near 10th Avenue have landed a construction loan of roughly $45 million, another indication banks are becoming more willing to lend to condominium projects.
A partnership of JDS Development Group and Property Markets Group is converting the upper floors of the 1920s telephone exchange building designed by Ralph Thomas Walker into 71 luxury condos.
A handful of new condo projects have begun to get financing in recent months, but this development, on the western edge of Hell's Kitchen, is one of the first in a less established neighborhood to land a loan.
The western edge of Hell's Kitchen north of 50th Street—once dominated by car dealerships, parking lots and diners—has experienced a recent development boom.
At West 57th Street between 11th and 12th avenues, the Durst Organization is developing a pyramid-shaped rental building designed by Bjarke Ingels. Two Trees Management is already well into leasing its Mercedes House rental project on 53rd Street and 11th Avenue.
But thus far the development has been dominated by rental buildings, for which it is easier to get construction financing.
JDS and Property Markets Group closed on the purchase of the upper floors of their 50th Street building for more than $20 million in 2011. Verizon retained the lower floors for its use.
The partners also brought in Starwood Capital to contribute additional equity to the project. The trio had worked together on a condo project in Chelsea and a development site at 107 W. 57th St.
Their broker, Jason Cohen, managing director of Mission Capital Advisors, said the team's record of doing business together made it easier to get the loan from PB Capital, a member of Deutsche Bank Group.
"It's important having a group that's experienced in doing deals together," Mr. Cohen said.
They also developed a Ralph Thomas Walker-designed 1929 Art Deco building in Chelsea, where they are seeking record condo prices for the area of between $4.5 million to $55 million for a combination of units.
The partners said they plan to begin sales on the Hell's Kitchen building later this year, and to seek similarly ambitious pricing for the area.
"It will shatter price records for that neighborhood," said Elliott Joseph, executive director of Property Markets Group.