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Category ArchiveJ.P. Morgan Chase

Atlanta REIT Broadtree Seals $100M Credit Facility, Eyes Expansion

Real estate investment trust Broadtree Residential has lined up a $100 million line of credit from J.P. Morgan Chase, according to an announcement from the firm.

Broadtree, which boasts a portfolio of five Atlanta-area multifamily developments totaling more than 1,500 apartments, aims to use the funds to bolster balance-sheet flexibility as it looks to expand beyond Georgia’s state lines.

In the past, Broadtree “had predominantly financed our assets with government-sponsored entity debt,” said Ryan Albano, Broadtree’s chief financial officer, referring to loans secured by agencies like Fannie Mae and Freddie Mac. “That’s certainly attractive from a cost-of-capital perspective, but we wanted to create some balance-sheet flexibility and get this line in place so that as we grow in scale, we can eventually migrate into the unsecured borrowing market.”

J.P. Morgan’s credit facility will be available for Broadtree at a floating interest rate above Libor, with adjustments built in depending on assets’ leverage profiles, Albano said. The balance sheet flexibility it provides should help on two fronts.

First, it could grant the REIT the financial ammunition to contemplate a northward expansion.

“We’re predominantly a Southeast-focused private REIT, with all of our office assets today in the Atlanta market. But we’re considering opportunities that stretch up into the Mid-Atlantic,” Albano explained.

Second, the balance-sheet flexibility the facility provides could go a long way toward bolstering Broadtree’s credibility when it comes to closing deals.

“I think it has benefits from a surety-of-close perspective,” Albano said. “Sellers in an acquisition, they want to know that the buyer is ready and willing to close. It will certainly help us as we’re making offers.”

A representative from J.P. Morgan Chase declined to comment on the deal.

Source: commercial

Does 270 Park Avenue Deserve to Be Saved?

When J.P. Morgan Chase announced last month that it would demolish its 52-story headquarters at 270 Park Avenue in Midtown, preservationists and architecture fans were up in arms. The bank said it would tear down the 1961 modernist skyscraper to build a new 70-story headquarters that would house 15,000 employees and 2.3 million square feet of office space.

Architecture writers were quick to point out that 270 Park Avenue—also known as the Union Carbide Building—was an important example of mid-century corporate architecture. More importantly, it was perhaps the first high-rise designed by a woman, according to Curbed architecture critic Alexandra Lange. Natalie de Blois helped lead the team of architects at Skidmore, Owings & Merrill (SOM) that designed Union Carbide, under the supervision of Gordon Bunshaft, partner at SOM. De Bois, one of a handful of high-profile female architects at the time, also played a pivotal role in designing two other corporate icons of the 1950s and ‘60s: the Pepsi-Cola Building and Lever House (both of which are now landmarked).

Since de Blois and Bunshaft’s other well-known Midtown East works have landmark protection, critics argue that 270 Park should be designated a landmark, too.

“The point is not that she did it solo, but she was part of the team that designed this building and was instrumental in the design,” Lange said. “And she wasn’t talked about enough in her lifetime.” She added that the building was unique because in its early years, Union Carbide left the lobby open to the public and organized exhibits on art and finance there.

On Curbed, Lange explained that the building’s gridded exterior was “coated in one of Union Carbide’s latest products and thus, like Lever House’s window-washing apparatus, became a showcase for the company’s chemistry.” (Union Carbide has produced a slew of chemicals and household products since its founding in 1917, including antifreeze, Glad bags and plastic wraps, Energizer batteries, rocket fuel and asbestos. It occupied 270 Park until 1983, when it moved its operations to Danbury, Conn.)  

In his write-up on the demise of 270 Park, New York magazine’s Justin Davidson argued, “The Union Carbide Building deserves to continue existing, not because it was in the vanguard of a movement with a dubious urban legacy, but because it’s among the finest of its kind. The clear glass membrane, stainless steel fins, and slender bones combine to give it a texture and personality that so many imitators lack.”

And 270 Park is one of several architecturally significant structures in the neighborhood that deserve historic protection, preservationists argue. As the city was gearing up to rezone Midtown East in 2016, the Landmarks Preservation Commission (LPC) assembled a collection of properties that could merit designation. Although a dozen buildings were ultimately landmarked, advocates said there are several more properties that should have been seriously considered. Union Carbide topped the list, as well as the Universal Pictures Building at 445 Park Avenue (Kahn & Jacobs, 1946-47), the former Girl Scouts of America headquarters at 830 Third Avenue (SOM, 1957), the MetLife Building at 200 Park Avenue (Emery Roth & Sons, 1963), the National Distillers Building at 99 Park Avenue (Emery Roth & Sons, 1953) and the Lipstick Building at 885 Third Avenue (Philip Johnson, 1986). The landmark commission put another Johnson-designed office tower at 550 Madison Avenue on its calendar last fall after its owners threatened to dramatically renovate the building, but it hasn’t been officially voted on yet.  

“Further consideration of [270 Park] as a landmark is not among the commission’s priorities at this time,” an LPC spokeswoman said in a statement. “As part of the interagency East Midtown rezoning initiative, the commission evaluated buildings in the area, including this one. As a result, we prioritized and designated 12 iconic buildings that represented the key periods of development in the area as individual landmarks, but the J.P. Morgan Chase building at 270 Park Avenue was not among them.”

Not everyone believes that 270 Park is worthy of being saved. Matt Shaw of Architects Newspaper contended that the tower “represents the worst of midcentury American corporate architecture, something that at the time was totalizing, banal, repetitive and dogmatic.” Shaw added that Union Carbide should be remembered as the company responsible for the worst industrial accident in history, the Bhopal disaster in India, a toxic gas leak that killed 16,000 and exposed hundreds of thousands to a lethal gas in 1984. He asked in his publication: “Why not just let 270 Park die a natural death at the hands of the 21st century equivalent of Union Carbide: a multi-national bank? It’s really a beautiful story if you think about it correctly.”  

The disassembly of buildings like Union Carbide is exactly what the city intended when it dramatically upzoned Midtown East in August 2017. Mayor Bill de Blasio’s administration hoped that the new zoning would encourage the redevelopment of the area’s century-old office stock, which has been eclipsed by newer buildings in hipper parts of Manhattan. When J.P. Morgan Chase made its announcement about a new headquarters, the mayor crowed in a press release: “This is our plan for East Midtown in action. Good jobs, modern buildings and concrete investments that will make East Midtown stronger for the hundreds of thousands of New Yorkers who work here.” The development is expected to generate $40 million in improvements for streets and subway stations, which was one of the primary aims of the rezoning.

Still, preservationists were shocked to hear that 270 Park would meet the wrecking ball. “270 Park was not even identified as a development site” because the building already took up much of the site’s potential floor area, said Simeon Bankoff, the president of the Historic Districts Council. “Honestly it took everyone I know by surprise. The rezoning really changed the rules for development in East Midtown.”

When Union Carbide bites the dust early next year, the 1.3-million-square-foot structure—which occupies a full block between Park and Madison Avenues and East 47th and 48th Streets—will be the world’s largest voluntary demolition. It will take that title from the Singer Building, the 47-story, 612-foot tall skyscraper at 149 Broadway that was constructed in 1908 and torn down in 1967 to make room for One Liberty Plaza.

Chase will have to invest considerable time and money in knocking down 270 Park. And the decision to redevelop it comes only six years after America’s largest bank pumped tens of millions into renovating the building, adding eco-friendly features and bringing it up to LEED platinum status. Critics charge that the development will be a big waste of cash, especially since the financial institution already spent untold millions on the renovation in 2012.

“Above and beyond the landmark preservation process being kind of bent for this to happen, this strikes me as a deeply conspicuous consumption and something I find shocking on that level,” Bankoff said.

However, Robert Knakal, the chairman of New York investment sales at Cushman & Wakefield, pointed out that once the bank considered the cost of land in Midtown, it was cheaper to demolish and rebuild at 270 Park than to buy another site and try to develop it.  

“If that was a vacant lot today, the land value would be arguably approaching $1,000 a square foot,” he said. “So by the time they demolish the building, their land basis is going to be less than that. And that’s a heck of a lot less than it would be today.” (Land basis equals what you paid for the property, plus the cost of capital improvements and construction.)

The proposed demolition of Union Carbide also ignited a wave of fear, among preservationists and architecture enthusiasts, that the rezoning would inspire other landlords to knock down large, unique office properties in Midtown East. Knakal argued that probably wouldn’t happen for decades, given how challenging it can be to vacate big commercial buildings and cobble together development sites in Manhattan.

“A number of people have called me and asked, ‘Bob, is this a wave of this happening?’ Of the 16 sites the city projected to take advantage of the Midtown East rezoning, many have seven and eight owners, so it will take a decade to assemble those sites. And then you have to deal with the tenants. There might be 30, 40, 60 tenants. You can’t just say I want to knock the building down, please leave. Unless owners have a very particular set of circumstances with their tenants, it likely isn’t going to happen.”

J.P. Morgan Chase hasn’t released any details on the architects, contractors or developers involved in either the demolition of its old headquarters or construction of the new building, which is expected to be complete in 2025.

Construction experts predict that it will take at least a year to demolish the 700-foot-tall property, which will have to be torn apart mostly by hand.

First, in order to prevent dust and debris from affecting neighboring buildings or people walking by, the project’s contractor will shroud the building in scaffolding or netting. Then workers will have to remove any harmful materials, like asbestos and lead paint, and use hand tools to remove windows, fixtures and doors. The deconstructing of the building comes next. Metal facade panels would be carefully removed by hand. Excavators—like BobCats—and smaller tools would likely be used to break apart the concrete slabs of each floor, although some projects have deployed demolition robots to accomplish the task. In the final steps of the demolition, workers would take acetylene torches to the steel beams and superstructure, cutting the steel into smaller pieces floor by floor.

Ken Colao, of CNY Construction, explained the demolition of such a large building offers an opportunity to think about more efficient ways to take apart skyscrapers. “New regulations need to be developed with the building department to address the demolition of large-scale developments,” he said. “The current method—to enclose it with scaffolding and dismantle it by hand with small equipment—would be too time consuming.”

The contractors on 270 Park could use cranes to remove large pieces of the building. And disassembling the steel frame could be faster if workers cut through pieces of steel, and then a crane lifted the steel onto a truck, he said.

Developers in other countries have used even more unconventional methods: In 2013, a Japanese construction firm demolished a building by jacking up the steel columns with a hydraulic lift, cutting each column with a torch simultaneously, roughly two feet at a time, and then chopping up each floor of a 35-story tower.

Besides the usual worries about dust and noise, construction firms working on 270 Park will have to avoid cutting off the building’s standpipes. If a fire breaks out, firefighters connect hoses to the pipes, which link each floor of a building to the city water system. During the demolition of the 41-story Deutsche Bank Building at 130 Liberty Street—the second-largest building to ever be taken apart in New York—two firefighters died battling a 2007 blaze because they couldn’t reach a working standpipe. The building was heavily contaminated and damaged by the Sept. 11 attacks. Then the fire, sparked by a worker’s dropped cigarette, halted its decade-long, $160 million demolition. The incident forced the Department of Buildings to institute several rule changes, including prohibitions against smoking on worksites and regular inspections to make sure standpipes are maintained.

“When the fireman tried to hook up their hose to the standpipe, there was no water because the standpipe had been cut,” explained Richard Lambeck, chair of the construction management program at New York University’s Schack Institute of Real Estate. “The building department was supposed to inspect the building but they didn’t do it in the periodic way they were supposed to.”

There are also concerns about tearing out the building’s foundation, because it sits atop the Metro North tracks along Park Avenue and could contain asbestos, like many buildings from the 1960s. Colao suggested that the old foundation could be kept, at least partially, and then decked over with a new foundation to support the weight of the new, larger building.

Even with the issues surrounding the demolition of the Park Avenue tower, its replacement will have much more energy-efficient facade panels, windows and building systems.

“These curtain walls have a useful life, they don’t last forever,” said Richard Wood, the head of Plaza Construction, which handled the building’s renovation. “And no one would go back to the 60s era of single-pane glass [windows].”

And protecting buildings like 270 Park may simply be holding the neighborhood back, preventing it from competing with more modern office developments Downtown and on the West Side.

“There’s nothing beautiful about these 1960s buildings,” Wood continued. “[Preservation efforts] are just a way to stop growth and development. I would argue that maybe you would save the facade if it’s an old stone building with hand carving that’s hard to recreate, but I’m sure what they put there will be a lot more beautiful than what’s there now.”

Source: commercial

Toys ‘R’ Us Real Estate Arm Files for Bankruptcy, Affecting $859M of Debt

With Toys “R” Us’ liquidation plans underway, one of the toy chain’s property arms has filed for bankruptcy, impacting $859 million of debt.

On March 15, after failing to reorganize around its successful stores, the toy superstore said it had to liquidate. That meant the closure of around 700 U.S. stores, as Commercial Observer previously reported. Yesterday, Toys “R” Us Property Company I, a subsidiary of the 69-year-old toy company, filed for Chapter 11 in the Eastern District of Virginia.

“Toys already had roughly $5 billion of debt,” said Adam D. Stein-Sapir of Pioneer Funding Group, which specializes in analyzing and investing in bankruptcy cases, and who is not involved in the case. “Regarding the debt against the owned properties—$859 million—those creditors will be participants in the whole Toys bankruptcy case, with the caveat that their collateral is the owned real estate.”

The rest of the company’s creditors were part of the initial bankruptcy filing and their collateral is Toys’ other assets.

The $859 million figure was noted as the outstanding principal amount as of Sept. 17, 2017 in the bankruptcy petition filed two days later. The loans were set to mature on Aug. 21, 2019.

The largest claim in yesterday’s filing, obtained via Nationwide Research Company, is $129.7 million owed to Guggenheim Partners followed by $107.9 million owed to J.P. Morgan Chase and $107.8 million to H/2 Capital Partners.  A spokeswoman for J.P. Morgan declined to comment.

The local attorney representing Toys in the bankruptcy didn’t immediately respond to a request for comment, and nor did Toys’ counsel or a Toys spokesperson.

Source: commercial

British Haute Couture Fashion House Ralph & Russo Opening First NYC Store on UES

Ralph & Russo, a British haute couture fashion house, is opening its first New York City store at 680 Madison Avenue on the Upper East Side.

The company yesterday leased 5,800 square feet of retail space at the base of the property between East 61st and East 62nd Streets, a spokesman for the landlord, Thor Equities, told Commercial Observer. The space comprised 2,300 square feet on the ground and 3,500 square feet on the second floor, he noted.

The deal is for 15 years with an asking rent of $1,500 per square foot on the ground, the spokesman said.

“This favored brand of royalty, Hollywood stars and A-listers is the ideal fit for 680 Madison Avenue, a premier retail building located on the city’s most upscale shopping corridor,” Joseph Sitt, the CEO of Thor Equities, said in prepared remarks.

Ralph & Russo’s new space will be a flagship, according to WWD, which broke the news of the lease.

Thor’s Sam Polese, Albert Dayan and Alexandra Frangos represented the landlord in-house in the deal. David Baker of Isaacs and Company represented the tenant. Baker didn’t immediately respond to a request for comment.

Luxury fashion designer Tom Ford occupies 12,300 square feet in the building for its flagship Manhattan store, luxury men’s brand Brioni is in 7,000 square feet and eyewear collection Morgenthal Frederics has 650 square feet. Art gallery Barrington Fine Arts occupies 4,000 square feet of the space that Ralph & Russo has leased and will relocate to 4,250 square feet within the building, the Thor spokesman said.

Thor bought the leasehold for the 35,526-square-foot retail condo on the first two floors of Extell Development’s luxury residential tower for $277 million in 2013, according to The Real Deal, and pays $3.5 million in annual ground rent. Last year, Thor secured a $310 million financing package for the property, comprising a $215 million senior loan from J.P. Morgan Chase, and a $95 million mezzanine piece, as CO reported in August 2017.

Source: commercial

Millennials, Techies and the Brooklyn Multifamily Boom

At the end of 2017, I took over as the head of the Northeast for Commercial Term Lending, replacing Chad Tredway who is now the co-head of J.P. Morgan’s Real Estate Banking group. Since then, I’ve been educating myself on the city’s unique boroughs and submarkets. One of my favorite ways of doing so in slightly warmer months was by putting on my sneakers and taking long runs through them. But another way we remain on top of neighborhood changes is through periodic van tours of the markets we lend in. With Brooklyn constantly evolving, Chad and I recently went on a  tour of the borough to see what’s new.

It’s the New Economy

New York’s real estate market has always benefited from the city’s status as the capital of global finance. But in recent years, there has been a boom in commercial real estate that extends beyond Manhattan. Brooklyn’s revived waterfront neighborhoods have become home to many of the leading TAMI firms and have seen an increase in redevelopment.

Set along the East River, the iconic Domino Sugar Refinery has become an emblem of the borough’s new economy. Once the largest sugar refinery in the world, the Williamsburg site is now home to a redevelopment project that will offer 600,000 square feet of office space, 2,000-plus apartment units and six acres of new parkland.

To the south, the Brooklyn Tech Triangle hosts 11 universities and more than 500 tech startups. Today, there are at least 36 co-working sites in Brooklyn catering to this growing part of the local economy. Google and Facebook now have Brooklyn offices while new media giants like Vice have offices in converted warehouses nearby.

Brooklyn’s private sector employment grew by 29.3 percent between 2004 and 2014, far faster than any other borough. Over the same 10-year period, the number of residents with a bachelor’s degree grew by 77 percent. Adding to the borough’s dynamic makeup, economic diversity is a clear strength of the market with nearly 40 percent of jobs coming from small businesses.

Demographic Trends

The rise of Brooklyn’s TAMI sector is drawing a diverse crowd of young professionals to the borough, which has been a boon for the multifamily market. Unlike previous generations, who fled to the suburbs as their careers took off, millennials have shown a desire to continue living in the urban center, even as their paychecks and families begin to grow.

The influx of millennials has shifted the entire city’s demographics. Prime renting-age citizens (ages 20 to 34) now comprise 21.5 percent of New York’s population, a full percentage points higher than the nation’s average. With the prospect of owning a home in the city’s most desirable neighborhoods a far-reaching goal for most salaried workers, the tide of young professionals is driving demand for rental units.

Immigration has long been a source of demographic growth for the city and a strong force driving demand for rental units. From 2004 to 2014, Brooklyn’s population grew by 5 percent compared to 3.7 percent for New York City as a whole. Today, Brooklyn stands as the most populous borough with 2.6 million people.

Near-Term Headwinds

The city’s unique demographic and economic landscape has created a booming multifamily sector. Within Class-A product, rents in Brooklyn peaked in 2015, trended downward in 2016 and declined in 2017. Rent growth has slowed in Class-B and C assets. Approximately 16,000 residential units are under construction in Brooklyn with another 20,000 in the planning stages—which should continue to put downward pressure on rents and occupancies. In addition, population and job growth have both slowed. Finally, interest rates, and by association, mortgage rates, have begun their march upward—which negatively impacts values. And while the new supply will take time to absorb, fundamentals will eventually revert and values should stabilize.

Brooklyn’s Staying Power

There are many reasons for multifamily investors to remain optimistic about the long-term prospects of Brooklyn. It has transformed from an industrial hub to the heart of the city’s most vibrant industry cluster, which should continue to draw in young professionals. People want to live in Brooklyn and meaningful jobs are locating there. There are other reasons to be optimistic if you are a multifamily investor: Median home prices remain at all-time highs at approximately $750,000 and there are nearly 14,000 rent-stabilized buildings in Brooklyn. Both of those factors add to the stability of the tenant base and the underlying cash flows of the existing multifamily stock. As a lender, we see these factors as positives for NYC’s multifamily investors and believe in Brooklyn’s staying power.

Kurt Stuart is head of Northeast commercial term lending at J.P. Morgan Chase. 

Source: commercial

J.P. Morgan Chase Takes 440K SF at 390 Madison

Financial giant J.P. Morgan Chase has leased the rest of L&L Holding Company’s 390 Madison Avenue, taking 436,905 square feet in the 32-story Midtown East office building, Commercial Observer has learned.

The firm will take 16 full office floors and two retail spaces in the newly revamped property, which fronts a full block between East 46th and East 47th Streets, just north of Grand Central Terminal, according to a release from the landlord.

Its space includes a conference center, multiple outdoor terraces and several double-height amenity areas, plus a Chase Bank branch on the ground floor. The banking and financial services firm will occupy half of the 850,000-square-foot building on a 10-year lease. The company, which is America’s largest bank, will take up floors two through six, 14, and 22 through 32. Sources familiar with the deal told CO that asking rents in the building range from $87 to $125 a square foot. 

L&L’s David Levinson, David C. Berkey, Andrew Wiener and Jim Traynor represented both sides in the deal.

“JPMorgan has long been a stalwart of the Grand Central District, and their continued long-term commitment will serve as a major boost to this iconic Midtown neighborhood,” Levinson said in prepared remarks. “We are proud to welcome them to 390 Madison Avenue.”

Last week, J.P. Morgan Chase announced it would knock down its existing headquarters at 270 Park Avenue and develop a new, 70-story headquarters in its place. 270 Park is conveniently located a block east of L&L’s project, which will make it easy for the bank to relocate thousands of workers when it decides to redevelop its current home. The lease deal also comes after Crain’s New York Business reported in January that J.P. Morgan was considering leasing nearly 400,000 square feet of the building. 

The financial institution joins Japanese cosmetics company Shiseido, which signed on for 225,818 square feet on floors 15 through 22 in December, and law firm Hogan Lovells, which will have 200,000 square feet on floors seven through 12.

L&L is in the midst of redeveloping the century-old building by adding eight new floors, boosting the height from 24 stories to 32 stories. The “re-massing” of the property involves removing millions of square feet of steel and concrete from the base and constructing the eight new stories on top, bringing the building’s full height to 373 feet.

Source: commercial

Gay Men’s Health Crisis Takes 110K SF for New Garment District HQ

Nonprofit HIV/AIDS health care provider Gay Men’s Health Crisis (GMHC) is moving its headquarters to 307 West 38th Street in the Garment District, where it has agreed to take 110,000 square feet of office space at the George Comfort & Sons-owned building.

GMHC will occupy six floors—the second through fifth, seventh and eighth levels—at the 20-story, 300,000-square-foot property between Eighth and Ninth Avenues, the organization announced on Wednesday. GMHC plans to move into its new offices by the end of July from its current location at Brookfield Property Partners5 Manhattan West on the Far West Side, where it has operated since 2010 in a 129,000-square-foot space comprising the entire sixth floor.

Rents in the deal were not immediately clear. Savills Studley’s Ira Schuman and Stephan Steiner represented the tenant in the transaction, while George Comfort & Sons’ Se Kyung Kim handles leasing in-house for 307 West 38th Street. A spokeswoman for Savills Studley declined to comment, while a spokesman for George Comfort & Sons did not immediately provide comment.

The Real Deal first reported news of the lease.

In a press release, GMHC said the new space will “be flexible enough to allow for future growth” and will make its services “even more accessible to its more than 12,000 annual clients living with or affected by HIV and AIDS.” The nonprofit, which was founded in 1982 as the world’s first HIV/AIDS service organization, provides treatment and prevention services as well as research and advocacy work “with the goal of ending AIDS as an epidemic.”

“We’re excited to move our headquarters to a more central, accessible location that will also better accommodate our operations and the services we offer,” GMHC Chief Executive Officer Kelsey Louie said in a statement, adding that the new offices “will have an efficient, welcoming layout.”

The West 38th Street location will include a dining room for the organization’s clients; rooms dedicated to counseling, wellness services and group meetings; substance abuse and mental health clinics; and staff offices. GMHC will also have access to a rooftop space that will be able to accommodate events.

George Comfort & Sons refinanced the Garment District property last year with a $70 million loan from J.P. Morgan Chase, as Commercial Observer reported in December.

Source: commercial

TF Cornerstone Lands $144M Wells Fargo Refi for 45 Wall Street

Wells Fargo has provided TF Cornerstone with a $144 million Freddie Mac financing package to refinance the developer’s residential skyscraper at 45 Wall Street, according to property records filed today with New York City Department of Finance.

The loan, which closed on Dec. 15, replaces a $134 million Fannie Mae loan that was assigned to J.P. Morgan Chase on Nov. 30. Wells Fargo’s $144 million Freddie Mac refinance paid that loan off, and the bank provided an additional $9.8 million in proceeds, records show.

buildingphoto 55 TF Cornerstone Lands $144M Wells Fargo Refi for 45 Wall Street
Entrance to 45 Wall Street. Courtesy: CoStar Group.

J.P Morgan provided a modification in the form of a first mortgage in order to give the borrower time to refinance its maturing Fannie Mae debt—which was then assigned to Wells Fargo two weeks later.

The 27-story, 493,187-square-foot residential high-rise building—located between William and Broad Streets in the Financial District—was built in 1958 and is comprised of 435 residential and five commercial units, according to PropertyShark. Eight of the residential units are vacant, according to TF Cornerstone’s website. Monthly rents at the property run from $2,845 for studios to $6,849 for three-bedrooms.

The building’s use was converted from office to residential in 1996, and is the former headquarters of Atlantic Insurance Company, according to CoStar Group. Chase Bank and Tourbillon are the building’s largest commercial tenants, occupying 8,341 square feet and 2,952 square feet, respectively.

Representatives for Wells Fargo and for TF Cornerstone did not provide comment before publication. 


Source: commercial

JP Morgan Chase Boosts Commercial Real Estate Team With Key Hires

J.P. Morgan Chase’s hiring of Kurt Stuart as the new head of commercial term lending (CTL) for the northeast region was part of a more extensive hiring spree. The bank also recently added Winston Fant, Michelle Herrick and Julie Thick to its payroll.

As first reported by Commercial Observer, Stuart recently replaced Chad Tredwaynow co-head of real estate banking (REB)—in managing the northeast region’s multifamily lending strategy and loan originations. Stuart joined J.P. Morgan Chase in 2015 as a commercial term lending region manager in Southern California and recently moved to the Big Apple to lead a 150-person team covering New York, Boston and Washington, D.C. “We’re in three markets in the North East,  and we want to be the lender of choice in all three of them,” Stuart told CO in an interview last month.

Dallas-based Fant will lead commercial real estate treasury services in a newly created role, reporting to Al Brooks, the head of J.P. Morgan Chase’s commercial real estate business. Previously, Fant was the co-head of commercial real estate deposit & payment solutions at U.S. Bank.  

“We continue to build a team of exceptional people who are experts in real estate and are driven by our clients’ success and by transforming communities,” Brooks said in prepared remarks. “It’s our goal to provide certainty of execution and exceptional service to our clients in any cycle.”

Herrick has been named market manager for REB central region, reporting to Tredway. Previously, Herrick was a senior client manager at Bank of America Merrill Lynch.

“Commercial Real Estate companies deserve products that will help them manage their cash flow more efficiently and simply,” Tredway told CO. “We’re investing in solutions and services to provide our clients with an enhanced experience and a more convenient way for them to manage their payments and invoices.”

Thick has been hired to lead J.P. Morgan Chase’s REB subscription lending platform, working with institutional investors and fund sponsors on strategic real estate investments. Based in Chicago, Thick reports to Priscilla Almodovar, co-head of REB with Tredway.

“Top talent wants to be on a winning team,” Almodovar said. “We’re building on this momentum by continuing to hire seasoned real estate experts that will bring tremendous value to our business, clients and communities.”


Source: commercial

A Face to Chase: Kurt Stuart is JP Morgan Chase’s New Head of CTL Northeast

Kurt Stuart has had an exciting ride of late. The 36-year-old, just slightly outside of the cut-off for Commercial Observer’s 25 Under 35 list, is a father of 2-year-old triplets and just moved from Southern California to New York City to lead J.P. Morgan Chase’s commercial term lending [CTL] business in the Northeast. He replaces Chad Tredway, now co-head of the bank’s real estate banking business with Priscilla Almodovar. Stuart undoubtedly has big shoes to fill, but Tredway has complete confidence in his successor. “I am thrilled,” Tredway told CO. “Kurt has successfully proven himself as a leader. His ability to cultivate exceptional employees, provide guidance in the community and offer excellent service to our clients will help us maintain Chase’s leadership position in the market.”

Now, it’s time to get down to business and for Stuart to get up to speed on New York City’s many market nuances. He has his own way of educating himself on the  location of the bank’s assets that would make Forrest Gump proudby putting his running shoes on and jogging around them.

Commercial Observer: Are you from California originally?

Stuart: I actually grew up in the suburbs of Chicago. My mother was in education, and my father worked as an accountant for the state government. They both worked really hard so that my brother and I had ample opportunity to explore a wide variety of activities. I grew up playing sportsI played basketball, soccer and baseball through high school. I also started piano lessons when I was 3. I played the violin in grade-school orchestra, and I played the guitar.

Do you still play?

A little, yes. When I have time.

Do you think those childhood activities helped to shape you as an adult?

I think the diversity helped to develop my sense of curiosity, and it helped me to realize that you can do anything you want if you’re willing to work at it. I grew up with that value set, went to University of Illinois in Chicago, not a big school, and graduated with a finance degree from there.

How did you get into real estate?

During my sophomore year [in college], I was in an internship [at GE Capital], and one of my colleagues came to me and said, “I challenge you to do the Chicago marathon in the fall.” The one thing I didn’t do [from a sports perspective] was run cross country. He told me, “There’s no way you’re going to finish, you’ve never run a race before.” Like any typical 20-year-old kid I thought I was invincible and could do anything, so I said, “Not only am I going to finish, I’m going to beat you.” Which was an ambitious goal. I remember walking out of the room and immediately Googling, “How to train for a marathon.”

Why that piqued my interest in real estate was, starting the next morning, I said, “O.K., every morning I’m going to pick a direction and just run.” And I did. It ended up being a great way to learn the neighborhoods. You see how they change on a block-by-block basis and how real estate plays a role in transforming communitieswhich I found fascinating.

Did you beat your colleague?

I did.

How long were you with GE?

The internship I mentioned was supposed to be a three-month gig. At the end of those three months, I somehow finagled my way into another two years with them and was offered a role in GE’s financial management program post-graduation, which is an intense leadership program where you rotate around its businesses every six months. A colleague at the time convinced me to work in GE’s originations group in L.A. I was super excited about the role, but I started in July 2007, so at the peak of the last real estate crisis I was going to go be in originations, focused on high-leverage bridge debt on transitional assets. My timing was awful.

Needless to say, that didn’t last for long, and in 2009 our business changed strategy, and I joined our asset management team. For the next four years I was doing loan sales, asset sales and restructuring debt. I learned more during that time than I probably would have done in 10 years in an upcycle. It’s a tremendous crash course on what can work and [what] doesn’t work in real estate.

What was the most valuable lesson you learned?

A mentor once shared the Nelson Mandela quote with me, “It is better to lead from behind and to put others in front, especially when you celebrate victory when nice things occur. You take the front line when there is danger,” and that became very impactful during the financial crisis. From a leadership perspective, danger in the context of the business world is uncertainty and during the financial crisis there was boatloads of uncertainty. So, I got to see how leaders adapted their style and led their teams through that challenging time. I was in that role until 2013, when our business had pivoted back to growth mode.

Enter J.P. Morgan Chase?

Yes. I had a friend who introduced me to several of the leadership team members within the commercial real estate business here. I’d explored several opportunities, but I was always very drawn to the people I’d met at Chase. They’d built up a multifamily business that turned out to be the No. 1 lender in the country, but they were humble, and so we shared a similar value set. I knew after my first interview they were people I wanted to work with and a month later I had one final interview. It was seven days after my wife [Sarah] had given birth to our [triplets]. I remember telling my wife, “I hope that my excitement shines through, given the fact I haven’t slept in a week.” Fortunately, it did. They had an opportunity to lead the multifamily team in Southern California, and I was fortunate enough to be offered it.

How did the opportunity to lead the CTL business in the Northeast come about?

What kick-started it was Chad Tredway and his team building a tremendous presence out here. That success allowed him to take on some additional challenges within the firm, and I was lucky enough to be surrounded by a great team in California. The success of those two things allowed me this opportunity.

How do you think East Coast lending will differ from West Coast lending?

The good news is that investors invest and borrowers borrow for the same reasons in California as they do in New York. For me the learning curve consists of, one, as a leader, positioning my teams here to win; two, continuing to foster and grow relationships with some of the great clients we have in the Northeast; and three, learning the nuances of the submarkets. I’m going to bury myself in market reports and talk to market participants, but I plan to learn that the same way I learned the neighborhoods of Chicago.

By running around them?

Absolutely. There’s a lot of value in a good pair of running shoes. This morning I took an Uber up to the Bronx and ran 15 assets that we have up there. I did the Upper East Side today and saw six assets, and I’m going to do the East Village tomorrow.

 

20170920 20170920  dsc7963 edit final web A Face to Chase: Kurt Stuart is JP Morgan Chases New Head of CTL Northeast
Kurt Stuart. Photo: Robert Paul Cohen for Commercial Observer

What’s your primary focus as the new head of CTL?

Our commercial term lending business in multifamily is largely focused on workforce housing. We’re in 10 markets around the country, and they all have similar characteristicshigh barriers to entry, high cost of housing and a very large renting cohort. We focus generally on smaller balance loans, our average loan size is around $2.5 million to $3 million. Not to say we can’t do larger loans, but based on the client base we focus on that’s what we cater to.

Your team has grown from 28 to 150 with the move, how do you feel about that?

Leadership for me is a privilege, and whether that’s one person or 150 people I keep in mind that my  success as a leader is ultimately determined by the success of those around you. So, my biggest priority in this role is to find ways to help my team succeed.

Where in the real estate cycle are we now?

It’s hard to pinpoint what inning we’re in, but ultimately we’re not focused on where we are in the cycle but rather on building the right capabilities so we can continue to deliver for clients throughout any point in it. In terms of the lending market today, it’s still pretty healthy.

What are your goals for the CTL business?

The near-term goals are to build on the great momentum that we’ve had here. In the long-term, our goal is pretty singular. We’re in three markets in the North EastNew York, Boston and D.C. and we want to be the lender of choice in all three of them. We’re going to do that by fostering a culture that is absolutely obsessed with how we service our clients. And then we’re going to arm our sales teams with a product that is market-leading in the sense that it delivers on two fundamental needs of clientsspeed, and certainty of execution.

Chad Tredway told us that J.P. Morgan Chase places a lot of value on its young professionalswhat do you think that says about the bank?

The bank invests in talent, and we’re going to carry that through in the CTL business as well. Our leadership is focused on people that have good ideas and bringing those ideas to life. They’re going to continue to invest in folks who want to drive those ideas forward to move the business forward.

On a personal level, what do you want to accomplish by the year’s end?

A lot of morning runs around the neighborhoods [laughs]. And getting out there and learning more about our clients and their needs and how we can better service them.

Do you have a mentor?

I have several, which is a great problem to have. Alfred Brooks [head of J.P.Morgan Chase Commercial Banking’s commercial real estate business], Ed Ely [head of Chase commercial term lending] and Greg Newman [California area manager of multifamily lending for Chase] have been instrumental in helping me, and Chad Tredway of course.

Do triplets run in your family?

No, just a stroke of luck. They rule the roost.

Would you be happy if they ended up in real estate?

It’s a little early to tell what they will be when they grow up. Right now we’re focused on getting them through the living room without finding the knife drawer [laughs]. I just want my kids to find something they’re passionate about, and be really good at itif they do that I’ll be happy.

What’s your favorite thing about New York so far?

My favorite thing is also my least favorite thing. There’s a lot of good food here so you have to watch your waistline.


Source: commercial