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Blog
Jun 29

Real Estate Insights: Refinancing for Redevelopment

Today, we’ll highlight a deal to show you what title insurance costs, as well as what happens behind the scenes to streamline the closing process.

There has been a lot of news about life science real estate lately. According to Jones Lang LaSalle’s 2020 Life Sciences Outlook, New York City and New York State have committed more than $1 billion to facilitate the growth of the life science industry. With government support, real estate companies are building commercial laboratories for medical researchers, incubator spaces for biotech start-ups, and offices for pharmaceutical companies working to bring new drugs to market. Funding from the National Institutes of Health to research institutions in the city has risen every year since 2016, hitting $2.2 billion last year.

The Deal

Construction financing of $393 million for the redevelopment of 125 West End Ave.

New York County (Manhattan)

Loan Policy $867,946
Title Fees: $1,000+
Mortgage Tax (Borrower): $11,004,000
Mortgage Tax (Lender): $ 982,500
County Recording Fees: $1,000+
Title Grade: N/A

Cornerstone Insight

When it comes to Manhattan development deals, savvy developers recognize the need to research covenants and restrictions, which can apply to an entire block. In this case, we encountered a restriction dating back to the 1840s, which prevented the construction of “noxious businesses,” those that create pollutants.

The restriction was originally intended to prevent anyone from building a pig farm or distillery, but it could be interpreted, for instance, to apply to noise pollution. Making matters worse, the handwritten covenant was missing pages. Fortunately, our experienced examiners can analyze the writing style and determine which templates were being used. As a result, we successfully worked with the underwriter to include the restriction in its coverage, based on the negligible risk level.

If you have any questions about life science real estate or title insurance, or if you would like to discuss an upcoming or potential transaction, please contact us.