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Stalled TriBeCa condo project finds new life

Five Franklin Place, located at 369-371 Broadway, was seen as one of the last development sites in the TriBeCa area

December 16, 2010 11:00 PM | Amanda Fung

Glacier Global Partners, a freshly minted real estate investment firm, along with an unnamed foreign partner, has purchased the $40 million first mortgage on the stalled condominium project Five Franklin Place in TriBeCa. Glacier Global and its partner plan to revive the project.

Five Franklin Place, located at 369-371 Broadway, was seen as one of the last development sites in the TriBeCa area. The sale came just days before a scheduled auction by real estate turnaround firm Procida Advisors.

In January, Procida Advisors was retained by the lender, an undisclosed hedge fund, to auction the site, but the auction was cancelled after Glacier Global emerged as a strong buyer. The site was originally to have been developed by Sleepy Hudson into a 20-story luxury condo with 55 units.

According to Bill Procida, president of Procida Advisors, 100 people were interested in bidding on the note before the mortgage was sold to Glacier Global. The all-cash deal closed Thursday. Financial details of the transaction were not disclosed.

“The site is in a great location. It is one of the last good development sites in TriBeCa,” said Eric Scheffler, a principal at Glacier Global, which was formed a year ago. “From our standpoint, it’s not a risky investment because the development’s foundation is already in place.”

Glacier Global plans to revive the project as a condo, but with a new design. The building’s previous architect under Sleepy Hudson’s plan was well-known Dutchman Ben van Berkel of UN Studio; his plan was seen by many as being overly ambitious. As just two stories of the structure constructed, Mr. Scheffler expects the project will need an additional 20 months of work.

Glacier Global will be redesigning the development and “is keeping its options open,” Mr. Scheffler said. The firm said it is considering Procida’s alternate, more cost-efficient design by architecture firm Montroy Andersen DeMarco for the project.

“We are now looking for construction financing,” said Yaniv Blumenfeld, the investment firm’s founder, who is confident that Glacier Global will be able to obtain the necessary funds as the finance market begins to loosen. “We have good relationships with a number of banks, and we are putting a significant amount of equity in the deal.”

Based in New York City, Glacier Global has an office in Miami and spent the last year growing. It specializes in core and opportunistic equity investments and debt financing. The firm’s founder and principals each have more than 15 years of real estate and investment experience and hail from major banks such as Eurohypo and J.P. Morgan Chase & Co.

In addition to this latest deal in TriBeCa, Glacier Global recently bought a non-performing note of a small residential building on 58th Street. Details of that transaction were not disclosed.