Starwood Property Trust and Starwood Capital Group, on behalf of Starwood Distressed Opportunity Fund IX, co-originated a $475 million first mortgage and mezzanine loan for the acquisition and redevelopment of 701 Seventh Avenue, a 10-story retail building in New York’s Times Square. The loan will have initial funding of $375 million, with $100 million in future funding for redevelopment. It also contains an equity participation for the lender.

The Witkoff Group, along with New Valley LLC, a subsidiary of Vector Group Ltd and a subsidiary of Winthrop Realty Trust, acquired 701 Seventh Avenue from a non-institutional owner who reassembled the site through a series of negotiations with the building’s existing tenants. Witkoff, the primary sponsor in the deal, plans to implement a comprehensive redevelopment plan at the property over the next 30 months, including the demolition of the building’s interior and conversion into new retail space. The bottom three quarters of the building will house retail, and the top quarter will be dedicated to a food and beverage establishment.

The building also features 145,000 sq. ft. of air rights, and the redevelopment project includes plans for a showroom retail space and a platform to be built above the retail component that will be capable of supporting a 31-story hotel tower and a 22,000-sq.-ft. LED sign.

“This transaction is a prime example of our unique ability to provide and structure large, highly specialized loans on an expedited timetable that meets the needs of the borrowers while also completing our disciplined underwriting requirements,” said Starwood Property CEO Barry Sternlicht in a statement. “Our experienced team of professionals positioned us to provide a financing solution for The Witkoff Group and its equity partners while enabling Starwood Property Trust to meet or exceed our return targets.”