First Use is Best Use

Real EstateThe Bank of America has recently granted itself a 1.3 billion dollar mortgage. The amount is $325 million more than the original amount of financing for the building’s construction. We used to call that a “cash out Refi”. Regular people cant do those anymore unless they qualify.

The B of A building is mostly vacant. So I guess they didn’t have to qualify based on rents. The credit crunch doesn’t apply here. They have built themselves a 52-story Midtown Manhattan castle, which has the benefit of almost $700 million in tax incentives. Some of the subsidies are the result of promises to bring 1,500 new jobs to the city.

BOA currently has some 3000 New York employees. Over the next 20 years, the bank intends to add those 1,500 employees to its work force. “The new Bank of America Tower …will represent our strong, long-term commitment to New York City and our customers around the world,” Said CEO Ken Lewis. While the rest of us struggle, B of A has been approved for the largest single asset real-estate loan in the country.

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