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Category ArchiveAcquisition

Zenith Energy Lands $27M Barclays Mortgage on Brooklyn Petroleum Facility

Barclays Bank has lent $27 million to refinance a petroleum facility owned by Zenith Energy in Greenpoint, Brooklyn, according to city property records.

Zenith gained control of the site in December of last year, when the Dutch firm purchased U.S.-based Arc Terminals in a deal worth about $406 million, according to Law 360. The refinancing, which closed on March 21, rolls over previous debt from Atlanta-based SunTrust Bank, dating from Arc’s 2013 acquisition of the property.

In that deal, Arc bought the Brooklyn premises in a $27.4 million purchase from Motiva Enterprises, The Real Deal reported at the time. The 41,000-square-foot terminal, at 25 Paidge Avenue just east of the Pulaski Bridge, is an important node in the fuel distribution network throughout the New York area.

With offices in New York City and The Woodlands, Texas, Zenith’s Arc unit stores and distributes substances like liquified natural gas, asphalt, aviation fuel and naptha—used in paint thinner and lighter fluid—at facilities nationwide, from Pascagoula, Miss. to Grover, Colo. Its Brooklyn location, which boasts the capacity to store 63,000 barrels of fuel, “is strategically located in New York City with ample supply options to optimize gasoline throughput,” according to Arc’s website.

Motiva is a Houston-based firm fully controlled by Saudi Aramco, the world’s most valuable company. Motiva, which owns and runs the United States’ largest oil refinery, in Port Arthur, Texas, had controlled the Paidge Avenue facility since at least 1998, when the firm was formed as a joint venture among Texaco, Saudi Aramco and Shell Oil.

Representatives from Barclays, Arc and Zenith did not immediately respond to requests for comment.

Source: commercial

ACORE Lends $97M for JV Purchase of NJ Corporate Center

ACORE Capital provided $97 million to a joint venture of Rubenstein Partners and Vision Real Estate Partners (VREP) to facilitate the acquisition and capitalization of the Morris Corporate Center East & West in Parsippany, N.J., Commercial Observer can exclusively report.

Terms of the financing weren’t disclosed. The loan went towards the acquisition of one of the adjoined office buildings as well as to fund capital improvements aimed at adding amenities and attracting and leasing future tenants at the location.

The financing was arranged by Newmark Knight Frank’s Jordan Roeschlaub and Dustin Stolly, vice chairmen and co-heads of the firm’s debt and structured finance division, along with Managing Director Nick Scribani, sources told CO. NKF declined to comment on the transaction.

morriscorpcenter credit nkf 2 ACORE Lends $97M for JV Purchase of NJ Corporate Center
Entrance to Morris Corporate Center IV. Courtesy: Newmark Knight Frank

“Morris Corporate IV is the newest and highest quality asset within Morris Corporate Center. The superiority of the property, coupled with Rubenstein and Vision’s track record with office repositioning strategies, made this a great lending opportunity for ACORE,” ACORE Managing Director Jason Hernandez told CO. “ We are confident that we have best-in-class local sponsorship and a thoughtful, well-capitalized business plan to make the property the premier option for tenants (both large and small) in the market.”

NKF—out of it’s New Jersey office—also represented Intercontinental Real Estate Corporation and Ivy Realty in the sale of the property, which is also referred to as “Morris Corporate Center IV phase two.” Intercontinental and Ivy first purchased the building from MetLife in 2015, Globe Street reported in January.

Rubenstein and Vision purchased the other building in the assemblage—called “Morris Corporate Center IV phase one”—from SJP Properties, which is the original developer of the buildings, and Northwestern Mutual earlier this year. Cushman & Wakefield brokered the deal for the sellers and announced the transaction on February 28.

Built in 2000, according to the campus’ website, the two four-story office buildings are a combined 702,707 square feet and are situated at 389 & 399 Interpace Parkway within the Morris Corporate Center campus. The buildings are connected by a large, glass atrium lobby. “Morris Corporate Center IV phase one” is currently 71 percent occupied by four tenants, including U.K.-based Reckitt Benckiser and New Jersey-based management services company Skanska USA Building, Inc., according to information from C&W.

A spokeswoman for Rubenstein Partners did not immediately return a request for comment. Vision Real Estate Partners declined to comment on the deal.

Source: commercial

Greystone Lends $59M on Denver Resi Complex Acquisition

Besyata Investment Group nabbed a $59 million gap mortgage from Greystone to supplement its $65.5 million acquisition of One Dartmouth Place—a residential community in Denver, Colo.—according to an announcement yesterday from Eastern Union Funding, which brokered the bridge loan.

The three-year, interest only bridge loan carries a rate of 6.3 percent—3.75 over LIBOR—and a 90 percent loan-to-value, which Eastern Union Funding managing director Jeffrey Seidenfeld, who arranged the financing for Besyata, told CO is “unheard of in this market environment.”

Besyata partnered with New York-based private equity firm The Scharf Group to acquire the property, and property manager and developer BH Management will handle the day-to-day management and leasing, according to a news release published Wednesday on BusinessWire. The property’s seller was not immediately clear as officials at both Besyata and Scharf could not immediately be reached.

“We started the financing process with Freddie Mac, but when an equity investor dropped out—as sometimes happens—there was a gap in the capital stack,” Greystone Managing Director Dan Sacks, who originated the transaction, told CO. “With our versatility as a private lender, with a growing portfolio lending platform, Greystone was able to provide a 90 percent bridge loan to fill that gap, so the acquisition could be completed. We’ll look to exit the short-term financing with an agency loan down the road.”

The property, located at 11100 East Dartmouth Avenue in Denver, is comprised of 418 units and is currently 96 percent occupied, according to information from Eastern Union.  

The complex includes a playground, picnic areas with gas grills, a courtyard with a barbecue, a pet park, a 24-hour fitness center, indoor and outdoor basketball courts, facilities for racquetball, a business lounge and a TV lounge, a clubhouse, a game room, laundry facilities, a sauna and a swimming pool.

An official at Besyata could not immediately be reached.

Source: commercial

Northwood in the Running to Acquire HNA’s 245 Park Avenue

A number of firms, including Northwood Investors, are in the running to acquire HNA Group’s 245 Park Avenue, several sources with knowledge of the situation told Commercial Observer.

One Chinese bank official who spoke to CO said that while there are many potential suitors for 245 Park, it’s unclear whether HNA is willing to accept a price at the current market value—which many expect will be significantly below that which the conglomerate paid for it in 2017.

HNA purchased the 1.8-million-square-foot office tower at 245 Park Avenue for a whopping $2.2 billion from Brookfield Property Partners in May 2017 and is now on the verge of unloading the asset less than a year later.

This deal would come on the heels of Northwood scooping up HNA’s 386,921-square-foot 1180 Avenue of the Americas for $305 million on Feb. 15, financing the bulk of the transaction with a $237 million loan from the Royal Bank of Canada. HNA acquired the property in 2011 for $259 million from the Carlyle Group, according to property records.

In June 2017, HNA, the former airline-turned-conglomerate, was one of four major Chinese investment arms identified by the Chinese government to have borrowed too aggressively for offshore transactions. A month later, Chinese President Xi Jinping and China’s State Council levied restrictions on any future investment in overseas real estate and ordered those conglomerates to begin liquidating some of the major real estate assets they acquired.

An executive of a prominent New York-based landlord previously told CO that “the Chinese have had the outlier bid for a few years, and that’s what’s upped bid prices. Now that it’s removed itself from the market, it has to settle itself with price discovery.” The movement of 245 Park may be the start of that discovery.

Officials at Northwood were not immediately available for comment.

With additional reporting provided by Cathy Cunningham.

Source: commercial

Capital One Provides $81M for the Acquisition of Lenovo’s U.S. Global HQ

Capital One has provided a joint-venture of Sentinel Real Estate Corporation and Mumtalakat Holding Company—a sovereign wealth fund controlled by the Kingdom of Bahrain—with $81.2 million to acquire Lenovo’s United States global headquarters in Morrisville, N.C., the bank announced yesterday.

In their first ever joint venture, Sentinel and Mumtalakat purchased the property from London-based 90 North Real Estate Partners for $135.3 million, according to REBusiness Online.

Capital One syndicated $36.9 million of the acquisition loan to Regions Bank, keeping the remaining $44.3 on its books. The financing is a three-year, interest-only and adjustable-rate loan, with two 12-month extension options, according to information from Capital One. Seth Wiener, based at Capital One’s Melville, New York office, originated the transaction.

“The real estate sector is a key component of our portfolio growth strategy, and the U.S. real estate market is growing significantly. In fact, Raleigh-Durham is one of the fastest growing markets in the U.S.,”  Mahmood H. Alkooheji, CEO of Mumtalakat, said in a statement in a Feb. 6 news release from the fund. “The area has shown strong employment growth, at twice the national average over the past year, setting a new peak in total employment. It also boasts a dynamic business climate and solid infrastructure with a growing economy, which makes it a very attractive market for us to invest in. With this transaction, the sector represents approximately 22 percent of our total portfolio companies.

“Our partnership with Sentinel is in line with our collaborative approach to investments for further diversification and growth,”  Alkooheji, said in the Feb. 6 news release. “It furthers Mumtalakat’s real estate investment strategy by focusing on geographic diversification into high demand and developed markets across a broad range of income generating assets including commercial offices.”

Morrisville is a neighborhood situated between the towns of Raleigh and Durham. The headquarters consists of three buildings, totaling roughly 486,000 square feet, which sit on 67-acres, according to information from Capital One. It’s located just five miles from the Raleigh-Durham International Airport.

The property sits inside Research Triangle Park and is fully leased by Lenovo, a computer manufacturing company with another headquarters in Beijing. The three properties, which are linked by a pedestrian bridge, are located at 7001 Development Drive and 8001 Development Drive, two four-story buildings built in 1995 and 1998, respectively, and at 7501 Development Drive, which is a two-story property constructed last year, according to information from LoopNet.

The buildings feature a cafeteria, food service operations, a fitness center, outdoor patios, a new conference facility and employee break rooms, according to REBusiness Online. The property’s outdoor amenities include a sand volleyball court, a basketball court, a five-acre lake and a 16-acre nature preserve. Recently, Lenovo was approved for a $7.5 million project to add covered parking and a roof-mounted solar array.

“We are very pleased to be venturing with Mumtalakat on this first joint acquisition,” John Streicker, chair of Sentinel Real Estate, said in prepared remarks. “Sentinel is very comfortable with the Raleigh-Durham market. We have been active investors in the region since the 1970s and maintain a regional office there. The stable, long-term growth exhibited by the region bodes well for this exceptional property. For the last decade and a half, Sentinel’s corporate strategy has been to align ourselves with sophisticated global investors. We find that these cross border alliances have growing importance as the world becomes more interconnected. We continue to learn from the fresh perspectives and new practices that accompany these partnerships.”

Neither Sentinel nor Mumtalakat could immediately be reached for further comment.

Source: commercial

Madison Realty Capital Lends $38M on Queens Mixed-Use Development

Madison Realty Capital (MRC) provided a $37.5 million first mortgage to Queens-based developer AB Capstone to start construction on a planned 17-story, mixed-use building at 3-50 St. Nicholas Avenue as well as purchase two adjacent commercial buildings in Ridgewood, Queens, MRC announced yesterday.

The loan proceeds were utilized to buy out an existing partner–who MRC declined to name—pay off previous financing on the development site, fund the construction of the foundation for 3-50 Nicholas Avenue and acquire two adjacent buildings, located at 16-37 Woodbine Street and 54-31 Myrtle Avenue in Ridgewood, according to the lender.

16 37 woodbine street mrc credit propshark 03082018 Madison Realty Capital Lends $38M on Queens Mixed Use Development
16-37 Woodbine Street. Photo: PropertyShark

A spokesman for MRC declined to elaborate on the financing, which the firm said  it closed in just seven days.

“This is a great example of our ability to rapidly evaluate and underwrite a deal with many moving parts, and we’re pleased to provide financing toward the development of a mixed-use retail, residential, and office project by an experienced, high-quality sponsor,” Josh Zegen, the managing principal of MRC, said in prepared remarks. “We believe the completed property will be unparalleled in its market.”

AB Capstone’s planned 17-story, 234,623-square-foot, mixed-use tower will be comprised of 129 residential units and will include 90,000 square feet of commercial space, 3,300 square feet of community facility space and 352 parking spaces. Once constructed, it will be the tallest building in Ridgewood and the neighboring Bushwick in Brooklyn, according to MRC.

“[Madison] came through for us with a single-source financing solution for our Ridgewood

Assemblage,” AB Capstone’s Meir Babaev said in prepared remarks. “The process was smooth despite the accelerated timeframe we required, and this financing enables us to move forward with our business plan.”

The two additional buildings are currently 100 percent occupied by retail, office and medical office tenants.

Built In 1930, the two-story, 5,000-square-foot building at 1637 Woodbine Street is comprised of six commercial units, according to PropertyShark. The two-story, 7,170-square-foot property at 5431 Myrtle Avenue has eight commercial units and 5,470 square feet of retail space.

An official at AB Capstone was not immediately available for comment.

Source: commercial

Domain Companies Secures $38M in Debt to Finance Gowanus Warehouse Acquisition

The Domain Companies has sealed a $38 million financing package for its purchase of an industrial building in Gowanus, Brooklyn, according to an announcement from HFF, which arranged the financing.

Property records show that the largest share of the debt comes from CIT Bank, which contributed a $25 million floating-rate mortgage to the package. New York City-based Sherwood Equities chipped in a $13 million mezzanine loan, completing a debt package that represented about 80 percent of the $47.5 million purchase price.

“Sherwood Equities’ lending platform was a perfect match for the project given, their appetite for pre-construction New York land loans and comfort with the rezoning of the property,” Christopher Peck, the leader of HFF’s team for the transaction, said.

The 65,000-square-foot building, at 420 Carroll Street, now hosts Alex Figliolia, a plumbing and sewer contractor. But with the Department of City Planning considering a significant rezoning of the historically industrial neighborhood, Domain is eyeing conversion of the site into a mixed-use development that would include housing—including some affordable units, HFF said.

A representative from the contractor declined to comment on whether it had yet spoken with its new landlord.

As the rezoning plans move forward, Domain has been eager to stay ahead of the curve. In December, it bought another warehouse in the neighborhood, at 545 Sackett Street. Matthew Schwarz, Domain’s co-founder, told Crain’s that he hopes to turn that site, too, into a mixed-use development that includes affordable housing.

Plans for the rezoning aim to make the Gowanus Canal the focal point of a reinvigorated and more pedestrian-friendly neighborhood—and the 420 Carroll lot includes about 250 feet of frontage along the waterway, immediately south of the Carroll Street Bridge.

The sale represents an impressive return for previous owner Property Markets Group, which bought the warehouse in 2012 as part of a two-property, $9 million acquisition.

Representatives from Sherwood and CIT Bank did not respond to requests for comment.


Source: commercial

Cortland Partners Nabs $50M Acquisition Loan for First Phoenix Foray

Atlanta-based Cortland Partners has secured a $49.6 million loan to acquire its first Phoenix-area property: a 412-unit multifamily complex called Arrowhead Summit, according to an announcement from Walker & Dunlop, which structured the deal.

The Freddie Mac acquisition loan takes advantage of a flexible structure known as “float-to-float.” For three years, Cortland will owe only interest at a floating rate while it finishes a renovation of the property. After that, the company will embark on paying off a separate seven-year floating-rate loan, including two years of interest-only payments.

“Walker & Dunlop and Freddie Mac proved to be outstanding partners in helping us close our first deal in Phoenix,” Mike Altman, Cortland’s head of investments, said in a statement. “We are thrilled about this acquisition and look forward to not only transforming Arrowhead Summit but also growing our footprint in the greater Phoenix market.”

Cortland plans to pour $9 million into renovating the property, in the northwest suburb of Glendale, Ariz., over the next two years. The management company aims to upgrade energy efficiency and add to in-unit amenities, including new kitchen fixtures, fireplaces and thermostats that can connect to the Internet.

It also aims to up the rent. Today, 800-square-foot one-bedrooms let for between $950 and $1,200 per month, while 1,100-square-foot two-bedrooms go for just under $1,400.

“We are confident that Cortland’s substantial construction, development and operating experience will ensure a successful repositioning of Arrowhead Summit,” Walker & Dunlop’s Stephen Farnsworth said in prepared remarks. “[Cortland] has a fully integrated platform…which allows them to successfully execute large-scale renovation projects such as Arrowhead Summit.”

Representatives for Cortland, Walker & Dunlop and Freddie Mac were not available for further comment.

Source: commercial

MetLife Lends $144M to Finance Orlando Office Trio

Southwest Value Partners has sealed a $144 million mortgage to finance the acquisition of a portfolio of three Orlando, Fla. office buildings, according to an announcement from the lender, MetLife Investment Management.

The five-year cross-collateralized loan supported the purchase of Bank of America Center, Citrus Center and One Orlando Centre—all situated downtown. Bank of America Center, at 28 stories, and Citrus Center, at 19 stories, are among the tallest buildings in the city.

Combined, the three properties, which total over 1 million square feet, sold for $208 million, The Orlando Sentinel reported. All three had been in the hands of Cousins Properties, a real estate investment trust based in Atlanta.

Eastdil Secured brokered the transaction.

“This deal came about via our relationship with Eastdil and our familiarity with the Orlando office market,” Gary Dinka, a MetLife managing director, wrote in an email. “The good locations, diverse rent rolls and strong sponsorship with fresh equity were just some of the elements of the deal that were attractive to us.”

Tenants at the Bank of America building include its namesake bank as well as Broad and Cassel, a law firm with ten offices throughout Florida.

Like the Bank of America tower in 1987, the Citrus Center was Orlando’s tallest building when it topped out in 1971. Its suites host law firms and construction and engineering companies.

Southwest Value Partners, based in San Diego, maintains a diverse portfolio across regions and asset classes, including hotels, office buildings and multifamily developments in California, Arizona and the Midwest. In addition to the Orlando portfolio, it owns a DoubleTree hotel in Sunrise, Fla., about ten miles west of Fort Lauderdale.

The deal immediately made Southwest Value Partners the second largest Orlando landlord, the Sentinel reported. The firm was founded by Robert Sarver, the owner of the Phoenix Suns.

Representatives from Southwest Value Partners and Eastdil did not respond to requests for comment.

With additional reporting by Mack Burke.

Source: commercial

MetLife Gives $120M for Rockpoint’s LA Office Building Buy

MetLife Investment Management announced last week it provided $120 million to Boston-based real estate private equity fund Rockpoint Group for the acquisition of a Miracle Mile, Class-A office property at 5670 Wilshire Blvd. in Los Angeles.

The 10-year, fixed-rate loan closed on Jan. 3, marking MetLife’s first closed deal of 2018, Gary Dinka, a managing director within MetLife’s debt strategies group, told Commercial Observer. Brokerage Eastdil Secured acted as the deal’s intermediary, according to Dinka.

“This deal came about via our relationships with both the sponsorship Rockpoint and intermediary Eastdil,” Dinka told CO. “With our local presence in L.A., we naturally were aware of the real estate and the acquisition while it was in the works. The location, repeat borrower and fresh equity were just some of the attributes of the deal that we liked.”

Rockpoint purchased the the 27-story, 445,004-square-foot building from Blackstone Group in April 2017 for $215 million, or $483 per square foot, The Real Deal first reported, marking a big win for Blackstone, which had paid $137 million for the building in 2006.

Officials at Rockpoint Group could not immediately be reached for comment. A representative for Eastdil Secured did not immediately return a request for comment.

Source: commercial