Greystone announced the closing of a $550 million permanent Freddie Mac loan for a prominent mixed-income development in Manhattan.

Twenty-five percent of the 1,175 units at Sky Residences are designated as moderate and affordable housing. Ten percent of the units serve residents earning at or below 40% of the the area median income (AMI), 10% serve for residents earning at or below 60% of the AMI, and 5% serve residents earning at or below 120% of the AMI as required under New York’s new 421a program.
©Ines Leong/archphoto Twenty-five percent of the 1,175 units at Sky Residences are designated as moderate and affordable housing. Ten percent of the units serve residents earning at or below 40% of the the area median income (AMI), 10% serve for residents earning at or below 60% of the AMI, and 5% serve residents earning at or below 120% of the AMI as required under New York’s new 421a program.

The transaction allows joint-venture partners The Moinian Group and SL Green Realty Corp. to refinance the 71-story Sky Residences. The deal is the largest single-asset tax-exempt financing completed by Freddie Mac and the first-of-its-kind private-placement structure that includes permanent financing for hundreds of affordable housing units in New York City, according to officials.

Sky, located at 605 W. 42nd St., features 1,175 units and 70,000 square feet of amenity space. Developed by Moinian, the building also holds the distinction of being the largest single-tower residential building in the United States, with 25% of its units designated as moderate and affordable housing. Lifetime Fitness, Volvo, and Icon Parking occupy commercial space. The project is utilizing 4% low-income housing tax credits and both tax-exempt and taxable variable-rate bonds issued by New York State Housing Finance Agency (NYSHFA).

The $550 million permanent Freddie Mac loan for the 71-story Sky Residences marks the largest single-asset tax-exempt financing completed by Freddie Mac.
The $550 million permanent Freddie Mac loan for the 71-story Sky Residences marks the largest single-asset tax-exempt financing completed by Freddie Mac.

The Freddie Mac loan completes an exit from the original construction financing provided by Bank of China and Union Labor Life Insurance Co. in 2014. The permanent loan was structured as a direct purchase by Freddie Mac of the NYSHFA bonds with a pre-stabilized funding and early spread lock.

Freddie Mac completed the direct purchase of the bonds with plans to securitize the bonds in a single-asset securitization, a first-of-its-kind structure that provided certainty of execution while also delivering pricing far below a standard bond credit enhancement. The structure was put in place under the Affordable New York Housing Program, the city’s revamped 421a tax-abatement program.

“Sky brings more than 1,100 new apartments—25% with long-term affordability restrictions—to the front lines of the affordable housing crisis,” said David Leopold, vice president, targeted affordable sales and investments at Freddie Mac Multifamily, in a statement. “Such a large, complex transaction took a strong partnership between Freddie Mac, the New York State Housing Finance Agency, Greystone, and The Moinian Group.”

The Greystone Bassuk debt advisory team, led by Richard Bassuk and Drew Fletcher, represented the borrower and assisted in obtaining the Freddie Mac loan through Greystone’s Affordable Lending team.