Tishman Speyer secures $1.8B Spiral high-rise construction loan

Dive Brief:

Developer Tishman Speyer has secured a $1.8 billion construction loan from private equity firm Blackstone for its $3.7 billion, 2.8 million-square-foot Spiral office high-rise in Hudson Yards. It is one of the biggest construction loans in Manhattan history, according to The Real Deal.
Tishman Speyer also announced that pharmaceutical company Pfizer has signed up to be the skyscraper's anchor tenant, taking 800,000 square feet under a 20-year lease agreement. Pfizer will occupy floors seven through 21.
The loan and Pfizer deal will allow Tishman Speyer to begin construction on the Spiral in June. The developer has contributed nearly $2 billion of equity, and a Chinese investor, HNA Group, has also sunk an undisclosed amount of money into the project.

Dive Insight:

In October, Tishman Speyer spent $157 million purchasing the last of the necessary air rights for the Spiral, designed by Bjarke Ingels Group and a standout for the landscaped terraces winding up the building's façade. The developer has spent a total of $265 million to secure 1 million square feet of air rights.

Huge projects like the Spiral is one of the reasons the city's construction spending is at record highs. The New York Building Congress (NYBC) reported in late October of last year that the continuing building boom should see total spending hit $150 billion by 2019. The NYBC expected nonresidential construction to be twice that of residential spending from 2017 to 2019.

Another of those megaprojects driving the city's construction activity is the $3 billion One Vanderbilt mixed-use office tower near Grand Central Station. Like any other undertaking of that size in New York City, air rights also came into play in the run-up to developer SL Green breaking ground. SL Green had been in negotiations with Grand Central Station owner Midtown TDR Ventures for air rights, which Midtown valued at $880 per square foot, when the city rezoned the area. The new zoning made a deal with Midtown unnecessary, but the company filed a lawsuit claiming the city undercut its position. SL Green ended up settling with Midtown for an undisclosed sum.

The One Vanderbilt project, which is under construction, has seen major lease deals since the project was announced. Law firm Greenberg Traurig has signed up to lease four floors there, and Germany-based DZ Bank and its affiliate DVB Bank have agreed to lease 35,500 square feet. TD Bank is also leasing 200,000 square feet and will operate a flagship branch in One Vanderbilt.