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NEW YORK CITY-The Moinian Group, developer of the Marc, a 452,000-sf 393-unit apartment complex, close on $155 million in permanent credit enhancement and mezzanine financing for the site. Proceeds were used to repay a $135-million construction loan for the residence at 260 West 54th St.

Richard Bassuk, president of the Singer and Bassuk Organization, secured the financing package and had placed the one being repaid. James O’Reilly and Evelyn Savino worked with Bassuk, who says the newest financing involved three separate tranches. “Analyzing the permanent financing alternatives, we advised the borrower to retain $89.5 million of tax-exempt bonds, to redeem the project’s outstanding taxable bonds and to provide in their place a structured Fannie Mae variable rate financing in the amount of $55.5 million.”

The combination of tax-exempt financing and structured Fannie Mae financing totaling $145 million exceeded the original $135-million construction loan by $10 million. In addition, a third layer of financing was added in the form of mezzanine financing from Wachovia Bank, having a five-year maturity with amortization beginning 12 months following closing. “This enabled the borrower to receive $20 million of loan proceeds in excess of the proceeds of the construction loan.” Dan Cunningham and Bill Rosenbauer of Wachovia worked with Fannie Mae and SBO.

The permanent financing utilized auction rate tax-exempt bonds issued by the New York State Housing Finance Agency under its 80/20 program–which mandates a 20% affordable-housing component and 80% market-rate units–with such bonds credit enhanced by Wachovia Multifamily Capital Inc. under Fannie Mae’s permanent credit enhancement financing program. “The use of auction rate low-floater bonds, rather than the more traditional variable rate low-floater bonds, enabled the Borrower to achieve greater proceeds at a lower interest rate,” Bassuk says, adding that this is only the fifth time auction rate bonds have been used to provide permanent financing for a large multifamily project.

Bassuk notes that the complex structure was required in light of the increase in value of the project since construction and Moinian’s desire to monetize the appreciation in project value in order to obtain $20 million of proceeds in excess of the initial construction financing. The Marc is located on a full block-front along Eighth Avenue between 53rd and 54th streets. It features an 80,000-sf garage and 9,357 sf of retail space.

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