Amid talks of company sale, Howard Hughes lands $250M loan for Seaport project
Howard Hughes CEO David R. Weinreb and South Street Seaport (Credit: NYCgo)
As it explores a potential sale or spinoff, the Howard Hughes Corporation locked down $250 million in financing for its redevelopment of the Seaport District in Lower Manhattan.
The interest-only term loan comes carries a rate of 6.1 percent for the first two years then will shift to LIBOR plus 4.1 percent, according to the developer.
Only some of Howard Hughes’ Seaport properties — including the Tin Building and Pier 17 — will secure the loan.
A group of “leading Korean financing institutions” are backing the five-year loan, which Civitas Alternative Investments will administer, according to the investment manager. Civitas previously worked with institutional investors from Korea to provide a $550 million senior loan in 2017 to refinance Brookfield Property Partners’ 200 Liberty Street.
The financing deal comes as Howard Hughes, also based in Dallas, considers a possible sale. The development firm hired Centerview Partners to explore various options to help close a gulf between its stock price and net asset value.
Howard Hughes took on the Lower Manhattan site through a long-term ground lease with the city in 2010 and has since invested $600 million to redevelop the area, according to the developer. One of the renewed properties, the four-story Pier 17, opened last year.
Earlier this year, the developer hired architecture firm Skidmore, Owings & Merrill LLP to help create a plan for the district’s revitalization. The process is to include input from local stakeholders.
The redevelopment hasn’t been smooth sailing for the developer. Howard Hughes is facing renewed backlash at the development site, over a parking lot the firm acquired there at 250 Water Street that may have elemental mercury beneath the asphalt.