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Category ArchiveIron Hound Management

Unilev Scores $90M Debt and Equity Recap for Wells Fargo Place

Beverly Hills-based Unilev Capital Corp. has received a $90 million debt and preferred equity package to recapitalize Wells Fargo Place—a 37-story office property in St. Paul, Minn., Commercial Observer can first report.

KKR provided a $70 million five-year, floating rate loan in the deal, while an unnamed preferred equity investor provided the remaining $20 million.

Iron Hound Management’s Christopher Herron and John Wood negotiated a resolution with C-III on behalf of Unilev and arranged the new debt and equity recapitalization, sources said. 

The 635,000-square-foot building was erected in 1987 and is located at 30 East Seventh Street in downtown St. Paul. At 471 feet, it is the tallest office building in the city’s central business district, according to Unilev’s website.

Unilev acquired the property, previously known as Minnesota World Trade Center, from Zeller Realty Group in October 2006, according to an article by the Minneapolis/ St. Paul Business Journal, paying more than $100 million.

Prior to the new financing, the property was still cash flowing and well occupied but required a recapitalization in order to pay off the previous debt, sources said. 

“Through the new financing, new capital partners and a successful recapitalization, Unilev was able to pay this loan off at par, which is not the norm,” one source familiar with the transaction told CO.  

Today, Wells Fargo Place’s government and state-driven tenants include include Minnesota State Colleges and Universities, the Internal Revenue Service and—of course—Wells Fargo.

Officials at KKR declined to comment. Officials at Unilev did not respond to a request for comment. Officials at Iron Hound confirmed their involvement in the deal but declined to comment further.

Source: commercial

Chetrit Group Scores $218M ACORE Refi for Multistate Multifamily Portfolio

ACORE Capital has provided a $217.5 million loan to Joseph Chetrit’s Chetrit Group to refinance the Empire Multifamily Portfolio— a portfolio of multifamily properties located in Florida, Indiana, Pennsylvania, Ohio and Kentucky, Commercial Observer can first report.

Iron Hound Management Company Principal Robert Verrone arranged the five-year debt, which includes a first mortgage plus a mezzanine loan. Verrone declined to comment.

The multifamily assets were previously owned by Empire American Holdings. Chetrit Group acquired the portfolio—comprising 56 properties with a total of 5,400 units—in 2015, after being brought in as a buyer by Verrone. Prior to Chetrit’s acquisition, Iron Hound spent three years restructuring the portfolio’s $317 million CMBS loan, which was being specially serviced by LNR, with an A/B note modification, splitting it into a $205 million A-note and a $112 million B-note, as previously reported by CO.

The portfolio was seriously neglected and its loan in special servicing for five years when it was acquired two-and-a-half years ago. Chetrit Group stepped in and has since increased the portfolio’s NOI from $14 million to $20 million, one source told CO on the condition of anonymity.

“Before Chetrit Group got involved in the deal, the portfolio’s properties suffered a significant amount of disrepair and neglect,” said Tony Fineman, a managing director at ACORE. “Chetrit Group came in, righted the ship and significantly improved the performance of the properties.”

While there are many moving parts in closing a multistate portfolio loan, the complexities embedded within were more on the legal and title side, Fineman said.

“What we liked about this deal is the significant improvement in what was once a pretty dilapidated portfolio—both in terms of performance and the physical plan,” Fineman commented. “The Chetrit Group has done a tremendous job. This transaction has the unique blend of a really great cash-flowing portfolio with a really good amount of upside.”

ACORE closed more than $2 billion in loans in the fourth quarter of 2017 and the firm is expecting a busy 2018, too, Fineman said.

Multifamily is just one asset class that the lender is focused on. “We like the multifamily sector a lot,” Fineman said. “Like everything else, you have to be cautious, but we’re very focused on the particular markets and submarkets we’re lending in and the sponsors’ ability to execute business plans in those markets.”

Officials at Chetrit Group could not be reached for comment.

Source: commercial

Industry City Ups Its Tab to $647M

Financing additional development at the site, Bank of China and SL Green are upsizing their loan for the Industry City complex in Sunset Park, Brooklyn by $244 million to $647 million, according to an announcement by the ownership group—which includes Belvedere Capital, Jamestown and Angelo Gordon & Co.

“The $244 million upsize will be used to continue the momentum at Industry City over the last four years,” Andrew Kimball, the chief executive officer of Industry City, told Commercial Observer. “The new financing will help position the property for the next phase of development, allowing us to bring new spaces online, create new amenities, make infrastructure improvements and ultimately continue to drive leasing and job creation.”

Bank of China and SL Green already contributed $403 million to the six-acre property, which was first established as a cargo terminal in the 1890s. After the facility fell into disuse in the middle of the twentieth century, a coalition of commercial developers converted the site into 6 million square feet of commercial space beginning in the 1980s.

Today, Industry City’s 16 buildings host tenants including ClassPass, ABC Carpet & Home and the Brooklyn Nets.

Since the current ownership group launched a redevelopment of the site in 2013, it has poured more than $250 million into the site to upgrade the buildings, the group said. In those four years, tenants have leased an additional 3 million square feet of space while adding an average of 100 jobs per month.

Iron Hound Management’s Robert Verrone represented Industry City on both the initial lending and the current upsizing.

Iron Hound and the Bank of China did not respond to requests for comment. SL Green declined to comment.

Source: commercial