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Moinian Group Nabs $118M Square Mile, Bank of the Ozarks Loan for Dallas Office Tower

Square Mile Capital Management has provided a $118 million loan to The Moinian Group and SMA Equities for Renaissance Tower—a 1.7-million-square-foot office building in Downtown Dallas.

Square Mile brought in Bank of the Ozarks to take a senior portion of the loan, which will be used to repay an existing CMBS loan on the property and bridge the asset through stabilization.

HFF’s Whitaker Johnson and Steve Heldenfels arranged the financing on the dazzling tower, outside shots of which depicted the fictional home of Ewing Oil in the 1980s television series Dallas.

SMA Equities and The Moinian Group have owned the building since 2006. The previous loan was securitized in the Wachovia Bank-sponsored WBCMT 2006-C29 CMBS deal and split into a $64.5 million A-note and a $64.5 million B-note.

One of the tallest buildings in Downtown Dallas, Renaissance Tower sits in Dallas’ Central Business District. Its tenants include Hilltop Securities, Neiman Marcus Group, Dallas County and EY.

The Environmental Protection Agency also recently signed a 20-year lease for 229,000 square feet at the property, and the tenant is scheduled to move in December 2018. 

“We are excited to establish a lending relationship with SMA Equities and The Moinian Group on this transaction,” Square Mile Principal Matthew Drummond said in prepared remarks. “As Downtown Dallas continues to benefit from additional redevelopment and as evidenced by the recent signing of the EPA lease, Renaissance Tower is well positioned as a cost-effective alternative to other high-quality office buildings located in submarkets such as Uptown and Plano.”

“We received extremely competitive financing packages from multiple sources but ultimately closed with Bank of the Ozarks and Square Mile,” a spokeswoman for The Moinian Group told CO. “The terms gave us the flexibility we required to complete lease up of our Class-A office tower.”

Source: commercial

Newmark Goes Public with Offering on Nasdaq

Global brokerage BGC Partners listed its subsidiary real estate brokerage and advisory firm Newmark Group as a publicly traded entity today with an initial public offering.

BGC Partners Chairman and Chief Executive Officer Howard Lutnick (who is also chairman of Newmark) and Newmark CEO Barry Gosin rang the opening bell at the Nasdaq in Times Square, where Newmark is listed under “NMRK.”

“This is a pivotal moment for us. I look forward to the future,” Gosin, who has been CEO of Newark since 1979, said at the IPO. “I couldn’t be more excited about where we are going. I certainly know where we came from, which we’ll never forget. But where we are going is incredibly exciting.” 

Newmark is offering 20 million shares with an offering price of $14 per share. The company filed public documents Thursday that showed it previously was expecting $19 to $22 per share. Also, it was expected to offer 30 million shares.

The IPO is expected to close on or about Dec. 19, according to a BCG Partners release. At closing, BGC anticipates it will own about 85.3 percent of the shares of Newmark’s Class A stocks. BGC will hold all Class B stocks, giving the company approximately 93.2 percent of the total voting power for Newmark.

Goldman Sachs & Co., Bank of America Merrill Lynch, Citigroup and Cantor Fitzgerald & Co. are bookrunners for the public offering.

Newmark includes Newmark Knight Frank and mortgage lender Berkeley Point Capital. (BGC Partners picked up Berkeley Point, a 30-year-old company, in September for $875 million.)

The family firm began as Newmark & Co. in 1929. In 2005, it formed a partnership with London-based Knight Frank, thereafter becoming Newmark Knight Frank.

BGC acquired Newmark Knight Frank for an undisclosed amount in 2011. The following year, the company acquired brokerage Grubb & Ellis, and merged to become Newmark Grubb Knight Frank. (Earlier this year, it dropped “Grubb” from its name in a run up to become a public company, and Jeff Gural stepped down as chairman.)

Currently, Newmark has more than 4,600 employees and independent contractors in more than 120 offices and 90 cities in the United States, according to its latest public filings. The company also disclosed it had revenues of $1.3 billion in 2016 and through the end of the first nine months of 2017 the company had $1.1 billion in revenue.

“Our numbers will be clear. Our profits will be crystal clear. The comparisons will be clear. And no longer will Newmark ever be part of the small scrappy crowd fighting to get up to the top,” Lutnick said. “It will be crystal clear to everybody starting today and for every quarter going forward that Newmark is not only amongst the best, but is the fastest growing, is the most capable, has the most interesting things to say at every pitch. And they will know why you win.”

Source: commercial

Meridian Arranges $68M Bridge Financing for LA Office Building

Southern California-based J.H. Snyder Company has sealed a $68 million bridge loan from refinance its debt on a recently built North Hollywood, Calif. office building, Commercial Observer can exclusively report.

Minnetonka, Minn.-based Pine River Capital Management provided the three-year, interest-only loan, sources close to the transaction told CO. Officials at the alternative investment firm did not immediately respond to a request for comment.

Meridian Capital Group negotiated the financing on behalf of the owner. The brokerage declined to name or confirm the lender on the deal.

The nine-story, 179,000-square-foot building, at 5250 Lankershim Blvd., went up in 2011 and is fully occupied, according to J.H. Snyder. Tenants include a Kaiser Permanente medical clinic, a co-working space managed by Regus and the Art Institute of California, a non-profit university that offers degrees in design and media production.

“This property has maintained 100 percent occupancy for years, despite coming to market during the peak of the recession,” Mike Wise, a senior partner at J.H. Snyder, said in a statement. “In addition to our long-standing tenant and leasing relationships, that performance also highlights the strength and improvement of the [North Hollywood] submarket over the last decade.”

The Los Angeles basin’s decentralized geography spreads the region’s office tenants over a wide breadth of neighborhoods, from Downtown Los Angeles in the north-center of the basin to Beverly Hills and Santa Monica to the west. The refinanced office building, north of the Hollywood Hills in the San Fernando Valley, has performed well because of its transportation access, according to its owner.

“The building is in a good location on a main thoroughfare,” Jerome Snyder, the founder of J.H. Snyder, told CO. “It’s right next to the subway that goes downtown.”

The Los Angeles Metro’s Red Line stops a block and a half north of the Lankershim building, making it a popular transit option for the Art Institute’s students especially, Snyder said.

Los Angeles being Los Angeles, the building also features a 6-story parking garage with more than 700 spaces.

Even given the building’s strong occupancy numbers, leasing considerations presented a challenge in the refinancing, according to Meridian officials.”Although there is no current vacancy, the majority of the tenants roll over [in] the next several years,” Seth Grossman, a Meridian managing director, said in prepared remarks. “It was critical to tailor a loan with ample structure to prepare for that role, while simultaneously maintaining maximum flexibility to allow our client to operate the property on their terms.”

Source: commercial

ACORE Provides $132M Construction Loan for Cali Student Housing Property

ACORE Capital has closed a $131.7 first mortgage for the ground-up construction of The Graduate—a 19-story student housing building in San Jose, Calif., Commercial Observer can first report.

The loan, which has a 60-month term and closed on Dec. 8, was made to AMCAL Swenson, a joint venture of San Jose-based development firm Swenson and Los Angeles-based residential developer AMCAL Equities. The financing was arranged by Alison Company.

The Class-A, L-shaped property at 90 East San Carlos Street will sit on a 1.45-acre site located one block from the main entrance to San Jose State University. In addition to housing 1,039 students across 260 furnished apartments in its top 17 floors, the building will include 14,750 square feet of retail space, a four-level parking garage, an amenity deck and a pool.

The Graduate is located between the San Jose State University campus and San Jose’s SoFA District—the principal arts and entertainment area, stretching along South First Street between San Carlos and Reed Streets.

“The Graduate will serve as a significant bridge between campus and the SoFA District as well as the surrounding urban amenities of downtown,” Case Swenson, the president of Swenson, said in an announcement at the time of the project’s groundbreaking in October. Its construction is expected to be completed in 2020.

It’s been a busy year for ACORE Capital with the nonbank lender closing deals from coast to coast. In September, it closed a $63 million loan to Dr. Kiran Patel for the acquisition and renovation of Cheyenne Mountain Resort in Colorado Springs, Colo., as well as a $73.4 million financing for the redevelopment of 163 Varick Street in New York City. A month earlier, it provided a $121 million loan—which included a senior loan and a mezzanine portion—to developer Sterling Bay for its purchase of a vacant building in Chicago’s West Loop area.

AMCAL and ACORE officials weren’t available for comment by press time.

Source: commercial

Complex Expands With a Move to Part of Yahoo’s Office in Times Square

Complex Networks, the umbrella company that includes Complex and its sub-brands like First We Feast and Pigeons and Planes, is moving to the old New York Times Building.

The hip-hop-influenced media company subleased 80,000 square feet from Yahoo at Columbia Property Trust’s 229 West 43rd Street between Seventh and Eighth Avenues, Crain’s New York Business reported. Complex plans to leave its longtime, 64,000-square-foot office space at 1271 Avenue of the Americas between West 50th and West 51st Streets and take over the Yahoo space next week. Yahoo occupies 193,000 square feet in the historic, 482,000-square-foot property.

Rich Antoniello, Complex’s chief executive officer, told Crain’s that Yahoo’s offices appeal to the company because the space features four video production studios. Complex, like many media outlets, is focusing heavily on expanding its short-form videos, and it recently partnered with cable music channel Fuse. Over the past year, it has grown its slate of programs to 33 daily and weekly shows, focused largely on talk shows and reality shows.

Not surprisingly, Yahoo and Complex are both owned by Verizon. The telecom giant acquired Yahoo over the summer and purchased Complex a year ago in a joint venture with Hearst Communications.

Spokespeople for Yahoo and Complex didn’t respond to requests for comment, and the terms of the deal were not disclosed.

Source: commercial

Ad Agency Momentum Worldwide Heads to 60K SF at Brookfield Place

Ad agency Momentum Worldwide is packing up its Hudson Square offices and heading Downtown to Brookfield Place.

The Interpublic Group subsidiary has signed on for 60,000 square feet via a 10-year lease at Brookfield Property Partners300 Vesey Street, The Real Deal reported. Momentum’s new home includes the entire top floor of the 15-story building, part of the 14th floor and a private roof deck. Asking rent in the deal wasn’t immediately available.

JLL’s Scott Panzer, Robert Romano and Shannon Rzeznikiewicz represented Momentum in the deal, and it’s unclear who handled the transaction for Brookfield. Neither company’s spokesman responded to a request for comment.

Momentum will decamp its current space on the second and third floors of Jack Resnick & Sons250 Hudson Street for Brookfield Place in May 2018, according to information from CoStar Group.

In recent years, the marketing company, which has 2,000 employees and 40 offices, has run campaigns for American Express, Chevron, Microsoft, Coca-Cola, SAP and Verizon, as well as many other high-profile clients.

Other tenants in the 522,000-square-foot, 21-year-old building include CME Group, Pell Brothers Trading, Smith & Moore and KCG Holdings, CoStar indicates.

Source: commercial

Eastern Union’s Ira Zlotowitz on Using Data to Steer the Ship

Ira Zlotowitz has never been afraid to write his own script. As president and CEO of Eastern Union, Zlotowitz has made a name for himself as a relentless innovator, building what he founded as a two-person firm in 2001 into a still-growing company that did over $3.5 billion of business in 2017. Two years ago, Eastern Union announced it would cap fees on any deal at $135,000, a move intended to stake out territory in what Zlotowitz saw as a streamlining market. Brokers at the firm at first resisted the move, but soon realized that the increase in business more than offset the lower percentages they’d make on any given deal.

Now, as he angles to double market share next year towards the $8 billion mark, the brokerage founder is focused squarely on how to move as much business through his shop as will fit through the door. The 42-year-old father of five—Zlotowitz has a foster child and a son-in-law he considers his son in addition to three of his own offspring—talked to Commercial Observer last month about building market share, organizational innovation, and his bottomless appetite for data on his own company.

Commercial Observer: How was business this year?

Ira Zlotowitz: Business is going very well, thank God. It was a great year. As a firm, we made heavy investments into better people, better relationships, data and technology. I think we’ve perfected the art of melding all three into one nice symphony. We’re seeing the results across every platform within the company.

How about the bottom line?

This year we should be up about 10% from last year, which is a pretty impressive number when the market is flat, and you’re reading articles saying that everything is flat or has gone down.

So you’re saying you’re able to outperform the market?

They say that many people in real estate play a herd mentality. I would rather try to be innovative and ahead of the curb, and try to lead. Sometimes you lead too far in advance, and then you turn around and no one’s behind you.

Give me an example.

Technology wise, we spent money and overbuilt on technology years ago, and the market wasn’t ripe for it. We built an app several years ago when you weren’t able to get enough speed on your phone, and people didn’t have unlimited data. Today, it caught up to us, in that we had the whole foundation built. Now we’re able to dust off some of the things we did in the past and utilize them.

What use does an app have for a mortgage broker?

It has amazing calculators. It gives a real estate professional the ability to do all his underwriting on the go, in many cases with better calculations than he has in his office. It has live rates. It has a newsfeed. It has contacts, and it has comps. These are the features that every real estate player needs at every time. When a broker leaves the office, he is just as efficient on the road as he was in the office. I went to Israel, and someone said, “Oh, it must take you a few days to catch up again.” No—I didn’t lose a beat while I was there.

What’s most important capability it gives you?

Every deal that’s being worked on, I am linked to every person in the office whose work is involved in the deal every step of the way. I can see who my client is, the documents, all the quotes, I can see where the loan is holding throughout underwriting.

You’ve built Eastern Union from a two-person shop to a company that employs about 120. How did you decide how the firm should be organized?

Every single person has strengths and weaknesses. Someone who’s very good—that just means that on a scale from one to 10, they’re an eight out of 10. But there are still two things that they’re usually not good at—different things. So I found an expert in every segment of the business and I built a team around that person. Now, when a broker brings in a deal, he runs it, but he needs assistance for steps two and seven. Instead of just winging it, he now has an expert in two and an expert in seven. Another broker needs help in three and five—so he has assistance in three and five.

Did you ever see it as a risk to use such an unconventional structure?

I live by the motto, “live for today, without sacrificing tomorrow.” When I first started building out these expert departments and the technology, I started with steps that would certainly help everybody. So I found someone who was great at numbers only, and I [hired that person] to offer that person’s services to every broker in my office. The only risk I took was spending money. When a broker said, “No firm does it that way,” I’d say, “OK, so don’t use them.” Slowly but surely, people started using that expert. And then I went to the next step of expertise and the next step of expertise and I kept moving accordingly.

You spoke before about leading too far ahead. Can you give an example?

The one part where I went too fast for the market was when I changed pricing models. I came up with different products regarding pricing models, that seemed to be way ahead of how it’s done. I learned it’s just that people assume.

It sounds like your guiding philosophy is to build a company where your brokers can be maximally productive.

Correct. I’m very into data analytics. So I track every the company makes, and who’s the best out of every department. I use it has a teaching thing. That’s one place we keep getting better. At the same time, [we help] brokers to spend less time on opportunities that don’t come through, because they have better support and technology helping them. The broker, he now has more time available to him, so he can now bring in, say, 13 opportunities, instead of 10. The net result is that he will double his production working the same number of hours.

And that’s translating into results?

Analysts are working smarter, and the conversion rates are getting better.

What’s your next area of growth?

I’ve been focusing my energies on areas where there is a tougher barrier to entry, and where I can provide value. So we launched a bridge loan program. And the biggest growth in the company is a service I’m providing to investment sales brokers throughout the country. We launched this a month ago, and today we’re going to break 500 sales brokers.

What’s the play there?

I was able to take all these resources available to my brokers and offer them as a free service to investment sales brokers in the hope that down the line, it will convert into business for us. We’ve taken the whole brand, and we’re leveraging it up to help sales brokers.

Is there any concern that your attention is too widely split?

We’re not going all over the place. We’re in one place. We [try to be] the trusted advisor completing the capital stack.

Is running Eastern Union ever more than you bargained for?

A very big strength of mine is delegation. I delegate before the need to delegate. Most people delegate when their days are full. You delegate so you can take on more work. I delegate to a point where some days, even if I had nothing else to do, I would delegate so that when something came my, I was available.

What kinds of people do you like to hire?

I hire potential. I hire someone with a drive and heart and a willingness to do the work it takes to succeed. Once I find the right potential, I invest. My biggest competitors, all they do it look to poach my staff. “If Ira trained the person, they’re great anywhere,” [they think]. I look for people who will be very happy in what they do.

Once someone is on board, how do you help them succeed?

I find the strengths that they have. If someone’s great at numbers, I don’t make them talk on the phone. If someone’s a great talker on the phone, I don’t make them do numbers. I make the two of them work together to cover both their strengths.

Are you saying you can take anyone and make them into a quality broker?

My mom taught me to take the good out of every person. There’s a role for everyone in this business. The ones who have a tough time making it are the ones who have an ego. I like starting with people for whom it’s their first time in the real estate business, because their ego hasn’t been developed yet. You need to have an ego here, but I’d rather their ego be a healthy ego.

It sounds like you’re endlessly introspective about how the company is doing. Do you apply that way of thinking to your personal life too?

Growing up as an Orthodox Jew, [I believe that] everything comes from God and you want to make sure you’re doing the mission of God. You always reflect back and ask yourself, if you step off course, how do you get back on?

What’s your outlook for 2018? Any concerns?

There’s not really anything that worries me on the real estate side. If interest rates go up, things will slow down. I don’t really understand the ramifications of [the proposed tax reform] and how all of that will play out.

What are your projections for Eastern Union?

From my end of it, I feel like, based on all these initiatives including our new bridge financing department and the broker affiliate division, I’m really gearing up to double market share next year. If the market does the same amount of business [overall], I’m hoping to do $7 billion or $8 billion next year. I’m very optimistic about the company’s prospects, and I think we’re really just getting started.

What are your specific goals for market share?

I always thought of the market as being $350 billion to $450 billion, so that would put me roughly at 1 percent market share. But that doesn’t really come into context, because in our industry, there is no market share leader. The number-one firm might be at 10 percent. Let’s put it this way. I think that real estate—commercial real estate—is going to finally really get hit next year with [a wave of] technology, data, and all that stuff. And I think I’m the leader in those areas.

Source: commercial

Direct Mail Startup PebblePost Inks Deal to Quadruple Its Offices

PebblePost, a direct mail marketing startup, recently signed a 19,644-square-foot deal at 400 Lafayette Street to nearly quadruple the size of its offices, Commercial Observer has learned.

The company, which uses its software to learn consumers’ computer search habits and target them with printed advertisements for products, moved into its new digs earlier this month and is occupying the entire second floor of the five-story building, which is located at the corner of East 4th Street in Noho.

The asking rent in the deal was $75 per square foot, according to information provided by ABS Partners Real Estate

“400 Lafayette Street offers large, open floor plates that allow businesses to build  offices that foster creativity and encourage collaboration,” said ABS’ James Caseley in prepared remarks, who represented landlord Sand Associates with colleagues Charles Conwell and Joseph LaRosa. “The second floor provided the ideal amount of space for PebblePost, which is in the midst of an explosive expansion.”

PebblePost relocated from nearby 36 Cooper Square between East 5th and East 6th Streets, where it had 5,000 square feet.

Since PebblePost’s founding in 2014, the company has raised $63 million, according to Crunchbase. This year alone it raised $47 million with a combination of equity and debt.

“PebblePost was in immediate need of a larger space to accommodate its rapidly growing staff,” Savills Studley’s Craig Lemle, who represented PebblePost with colleague Nick Zarnin, said in a prepared statement. “The space at 400 Lafayette provides PebblePost the ideal location, size and buildout to move in quickly and continue to grow in a space that is in line with the company’s culture and business objectives.”

Existing tenants at 400 Lafayette include event ticket marketplace SeatGeek, advertising and technology company TripleLift and La Colombe Coffee Roasters.

Source: commercial

MTA, DOT Release Plan to Ferry Riders Across the River During L Train Shutdown

The Metropolitan Transportation Authority and the New York City Department of Transportation have unveiled their long-awaited plan to convey L train riders between Manhattan and Brooklyn while the MTA shuts down the line’s East River tunnel.

The shutdown will begin in April 2019 and last for 15 months. The MTA has argued that shuttering service between Bedford Avenue in Williamsburg and Eighth Avenue in Manhattan is the most efficient way to repair the L train’s Canarsie Tunnel, which was flooded with millions of gallons of water during Superstorm Sandy in 2012.

Eliminating the L for more than a year will disrupt commutes for 400,000 riders, 225,000 of whom take the train between Manhattan and Brooklyn. In order to get those riders into the city, the plan includes increased subway service on nearby the nearby G and J/M/Z lines, longer G and C trains, free MetroCard transfers between the Broadway G and the Lorimer-Hewes JMZ, and similar free transfers between the 3 train at Junius Street and the L train at Livonia Avenue.

screen shot 2017 12 13 at 6 12 19 pm MTA, DOT Release Plan to Ferry Riders Across the River During L Train Shutdown
Busway and bike routes along 14th Street. Image: DOT and MTA

DOT also plans to make major road changes to help move commuters across Manhattan. The agency will convert 14th Street into a bus-only street during rush hour between Third and Ninth Avenues eastbound and between Third and Eighth Avenues westbound. There will also be upgraded 14th Street Select Bus Service with a new pedestrian lane, dedicated bus lanes in each direction and a sidewalk expansion. Overall, the agency expects 38,000 riders will take the bus across 14th Street.

The plan also calls for Manhattan’s first two-way, protected crosstown bikeway along 13th Street, which will include a buffer separating cyclists from traffic.

Traffic patterns on the Williamsburg Bridge will shift dramatically to accommodate a handful of new bus routes. Only cars and trucks will with three or more passengers will be able to cross the bridge, in order to keep traffic flowing and keep the bridge clear for additional bus service. During rush hour, 70 buses would carry 3,800 commuters across the bridge. The MTA aims to run three new bus routes: one running from Grand Street L stop in Williamsburg to First Avenue and 15th Street in Manhattan; another running from Grand Street to Broadway-Lafayette in Soho, and a third from near the Bedford Avenue L stop to Soho.

screen shot 2017 12 13 at 6 12 08 pm MTA, DOT Release Plan to Ferry Riders Across the River During L Train Shutdown
MTA is planning new bus routes for Brooklyn riders once the L train shuts down. Image: MTA and DOT

And finally, the city also plans to roll out a new ferry route, connecting North Williamsburg to East 20th Street along the East River. DOT aims to run eight boats an hour in each direction, carrying up to 1,200 passengers an hour each way. Fares for ferry riders will be “integrated with” the M14 and M23 Select Bus Service routes, the agencies note in a presentation, which means that riders will get free transfers between the ferry and the bus.

Source: commercial

CIT Lends $35M on Creative Office Building in Oakland

CIT Bank has provided $35 million to New York-based real estate owner and operator Brickman to finance the acquisition and upgrading of Plaza 360, a creative office building located at 360 22nd Street in Oakland, Calif.

The five-year, non-recourse floating-rate loan was arranged by New York-based brokerage HFF.

Loan proceeds were used to acquire the property, with a portion of the undisbursed funds going toward common area upgrades and tenant improvements, according to an announcement from CIT.

“Plaza 360 is located in Oakland’s Uptown District, a prime spot close to restaurants, shops and several transportation options,” Matt Galligan, president of CIT’s real estate finance division, said in prepared remarks. “This transaction is the first with Brickman and demonstrates our effort to provide secure financing that maximizes value for developers.”

Built in 1957, the 115,186-square-foot property includes ground level retail space and has a large pool of tenants, including the United States Social Security Administration, according to property tenant information from CompStak.

“Plaza 360 is perfectly situated to allow Brickman to execute on its highly successful Bay Area, value-add office repositioning strategy,” Peter Smyslowski, a senior managing director at HFF, said.

Brickman has several West Coast office properties in its portfolio, including one in Los Angeles, two in San Francisco and two in Seattle, Wash.

In August, The Registry reported that the owner-operator had acquired the eight-story Plaza 360 building for $44 million from White Plains, NY-based True North Management Group, which had purchased the asset for $28.25 million in August 2015. With this transaction, Brickman was investing its Brickman Fund VI and purchasing primarily value-add office assets on the West Coast, according to the publication.

Officials at Brickman could not immediately be reached for comment.

Source: commercial