NYC’s Mandarin Oriental developers snag loan for unsold condos

DEVELOPERS of the Mandarin Oriental residences on New York’s Fifth Avenue secured an inventory loan to help with the cost of unsold luxury condos at the building.

Manhattan-based Northwind Group provided a US$120 million loan for the 50 remaining luxury condo units at 685 Fifth Ave, based on a statement. The property, which has a total of 65 condos, is located on the corner of 54th Street and Fifth Avenue. 

The project was built by New York-based developer SHVO and Deutsche Finance America, along with other equity partners including some of Germany’s largest pension and insurance fund managers. The group converted the building, formerly the headquarters of Gucci, into luxury condos with a rooftop pool, spa and gym. The project was completed earlier this year.

Condo inventory loans can help developers pay the costs of holding onto those units while they try to strike deals. High financing costs have weighed on buyers, but prices are holding up because New York faces a tough housing shortage.

“The city is undersupplied and that’s why you’re not seeing prices go down,” said Ran Eliasaf, founder of Northwind. His firm has closed on more than US$1.1 billion in loans across the US so far this year. 

The Mandarin Oriental developers added more cash equity as part of this financing, bolstering Northwind’s bet on the property, according to the statement. And a few units priced at more than US$25 million are slated to close in the next 60 days. 

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“We feel like New York is a healthy place right now,” he said. BLOOMBERG