Wellsford Real Properties recently used a new $32 million credit to refinance debt on a maturing $27 million construction loan. The Manhattan development and lending firm also needed capital to finance the third phase of redeveloping its Silver Mesa apartments into an upscale, luxury condominium community in Denver, said James Burns, cfo. Moreover, the company only had $700,000 remaining on its old loan and the terms of the financing did not allow for condominium construction. Wellsford eschewed the use of its credit facility because it wanted to remain nimble in case of future investment opportunities, noted Mark Cantulupi, chief accounting officer. "To the extent that we can, we look to keep the powder dry on our revolver," he said.
The three-year, $32 million three-year condominium construction loan, which expires December 2003, is priced at LIBOR plus 2%. The pricing on the previous loan, which was provided by Bank of America, was LIBOR plus 13Ž 4%, said David Strong, v.p. of development. The slight uptick is a reflection of the larger size of the loan and the company's debt, which stands at approximately 41% of its total book value of $380 million. Although B of A, which has had a long-standing relationship with Wellsford, won many of the bids for loans on several of the initial construction phases of the Silver Mesa apartment project, KeyBank National Association was tapped to provide the new loan. "They fought hard for our business and got the winning bid," Strong explained, noting that KeyBank offered better pricing on its line. He declined to disclose additional details about the loan agreement.