Professor Elam

Wed October 31 2012

The Children's Investment Fund Foundation will loan $400 M ot Los Angeles based CIM group  to construct 432 Park. 432 Park will be (really?) the tallest residential building in America at 1395 feet.  A CIM principal notes that his firm is obtaining debt that is low priced and flexible, flexible presumably for the borrower not the lender. CIM has raised 2/3 of the $1.245 Billion price tag in equity. But the $400 M is a non recourse loan meaning that 432 Park will be the only collateral. 

The average asking price is $5800 a square foot and about a dozen are actually under contract, wow,
talk about a secured deal!  For perspective which is what we provide here, that means a 2,000 sf condo would fetch $11.6 million. I checked the numbers on my Big Red Debt Calculator twice and yes that would be for one condo.

What could go wrong? So we have the Kingdom Tower at one kilometer going up in Saudi,. the tallest building ever on the West Coast, possibly with no tenants signed up, and now 432 Park the tallest residential building ever at one of the highest per sf prices ever. 

Social Mood is peaking….