Chetrit-Clipper Venture Secures $229M for Flatotel Condo Conversion

NEW YORK CITY—A partnership of the Chetrit Group and Clipper Equity has secured $228.5 million in construction financing for the office and residential condominium conversion of the former Flatotel property here.

The financing, arranged by New York City-based Meridian Capital Group, involves a two-year, non-recourse, interest-only loan that features a floating LIBOR-based interest rate and a one-year extension option. The total project cost is currently estimated at $300 million.

Meridian Capital Group Executive Vice President Aaron Birnbaum and Vice President Emanuel Westfried negotiated the financing transaction.

The Chetrit Group and Clipper Equity team plans to convert the former hospitality property at 135 West 52nd St. into a five-floor boutique office condominium and a 37-floor luxury residential condominium. The approximately 55,000-square-foot office condominium component will be located on floors two through seven of the building. The approximately 109-unit residential condominiums will span floors eight through 47.

Sales have commenced and have exceeded $2,000 per square foot, according to Meridian Capital Group. The Chetrit Group and Clipper Equity team acquired the property in 2013 from a venture consisting of Rockpoint Group, Atlas Capital and Procaccianti Group.

“Meridian initially placed the acquisition financing last year and worked with the sponsor on refinancing with a construction loan. The project has enjoyed a significant level of presales and construction is well underway and being funded with equity, making this an attractive opportunity for lenders,” says Meridian Capital's Westfried. “Meridian was able to identify several capital sources interested in financing the transaction on a non-recourse basis. We ultimately chose to move forward with the lender that provided superior economic terms coupled with the flexibility that will enable the borrower to best execute their business plan.”