Extell Development Co. has closed a $1.25 billion construction loan for The Torch, a 60-story mixed-use tower at 740 Eighth Avenue in Times Square. With the agreement, one of the city’s most ambitious projects for hospitality and entertainment looks a little closer to reality. About 40 of the 60 levels that were completed were done with the assistance of Davis Polk & Wardwell LLP. Davis Polk & Wardwell LLP represented on the transaction on approximately 40 of the 60 floors already completed. The Torch skyscraper is a hotel, retail, dining and entertainment investment in the heart of Times Square.
The financing package comprises $1.1 billion in construction loans from a bank group led by JPMorgan and $150 million in mezzanine financing from financial institutions in the U.S. The senior construction loan has a pricing of SOFR + 4.0% and the mezzanine financing is priced at 6.79%. Thus, the financing of The Torch skyscraper is approximately 95% of the total cost of construction of $1.31 billion.
The Legacy Park Gateway Crossing is another major mixed-use development project that is making headway. It is a $3 billion mixed-use project representing the largest development in Mesa’s history. As a result, the East Valley suburb overcame significant regulatory challenges such as annexation, zoning ordinance and retail tax incentive agreements. The development will occupy approximately 200 acres east of Ellsworth Road between State Route 24 and Williams Field Road, just north of the Arizona Athletics Grounds.
Outlook on The Torch Skyscraper
Scope on The Torch skyscraper features a hotel with nearly 1,800 rooms, which will be one of the tallest hotels in New York City. In addition, Extell has entered into a 40-year franchise agreement with an international hotel chain which will invest some $60 million in The Torch. The skyscraper also features retail, dining and food & beverage space, as well as some 130,000 square feet of advertising and signage space. The project has some unique features it will have that will distinguish it from the classic mixed-use building – entertainment and observation. The hotel’s existing business will be enhanced by three observation decks and a 250-foot amusement ride on the top floors of the tower, which will increase the tower’s desirability as a destination.
The Torch Skyscraper Project will make a significant amount of money each year.
The hotel, retail and advertising and entertainment aspect of the Torch skyscraper will produce $250 to $270 million in annual net operating income, according to the firm Extell. Moreover, the project’s several streams of revenue will make it an attractive entertainment center in the congested Times Square real estate market. The financing structure is indicative of the lender’s confidence in the revenue-generating potential of The Torch skyscraper and its market position.
Project Overview
- • Name: The Torch Skyscraper
- • Financing Closed: $1.25 Billion
- • Total Project Budget: $1.31 Billion
- • Location: 740 Eighth Avenue, Times Square, New York City
- • Developer: Extell Development Co.
- • Status: 40 of 60 floors completed, financing closed September 2026
Scope
- • 60-story mixed-use tower
- • Approximately 1,800-room hotel
- • Retail and food & beverage space
- • 130,000 sq. ft. advertising/signage area
- • Three observation decks
- • 250-foot amusement ride
- • Commercial and entertainment components
Project Highlights
- • $1.25 billion construction financing package
- • JPMorgan-led bank group providing $1.1 billion senior loan
- • $150 million mezzanine debt from U.S. institutions
- • 40-year international hotel chain franchise agreement
- • $60 million hotel partner capital commitment
- • Largest hotel projects in NYC by room count
Key Developments
- • Financing closed September 2026
- • 40 of 60 floors already constructed
- • Davis Polk & Wardwell LLP guided transaction
- • SOFR + 4.0% senior loan pricing
- • 6.79% mezzanine financing rate
- • Tel Aviv Stock Exchange filing disclosed terms
Key Challenges
- • Completing remaining 20 floors amid market conditions
- • Meeting $250–270 million annual NOI projections
- • Managing complex mixed-use operations
- • Marketing hotel and entertainment components
- • Coordinating international franchise partnership
Outlook
- • Construction to complete remaining 20 floors
- • Hotel operations launch upon completion
- • Entertainment and observation deck activation
- • $250–270 million annual NOI generation targeted
- • Times Square mixed-use destination completion
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