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Category ArchiveRefinance

Natixis Lends $68M to Refinance Bronx Retail Center

Simone Development has snagged a $68.5 million loan to refinance its Throggs Neck Shopping Center in the Bronx, Commercial Observer can exclusively report.

The 10-year CMBS loan closed at a 5.17 percent rate and features interest-only payments, according to Meridian Capital Group, which brokered the financing. A Meridian spokesman declined to identify the lender, but a source close to the transaction said that the loan is from Natixis, the French investment bank.

The mall, located just south of the intersection of the Cross Bronx Expressway and the Hutchinson River Expressway, includes 300,000 square feet of retail, now anchored by a 165,000-square-foot Target outpost. (That store is not collateral for the Natixis loan.) TJ Maxx, Famous Footwear, Mattress Firm, a waxing salon and an electronic cigarette seller number among the shopping center’s other tenants. Its four commercial buildings stand alongside a multilevel parking garage with room for 650 cars.

A mile north of the Bronx–Whitestone Bridge, which connects the Bronx to Queens, the Throggs Neck Shopping Center is almost directly adjacent to Trump Golf Links at Ferry Point, a public 18-hole golf course owned by the Trump Organization.

The deal marks the second mid-size financing Meridian arranged this week, following its announcement of a $54 million Bank of the Ozarks construction loan to Modus Hotels for development of the Pod Hotel in Philadelphia. The Throggs Neck loan was negotiated by Meridian’s Morris Diamant and Tzvi Krieger.

Representatives for Natixis and Simone Development did not immediately respond to requests for comment.

Source: commercial

Principal Financial Lends $25M on Downtown LA Apartment Complex

Quantum Capital Partners has secured $25 million in long-term, fixed-rate debt to refinance a 130-unit apartment complex located near the University of Southern California (USC) in Downtown Los Angeles on behalf Park City, a South El Monte, Calif.-based investor and management company, according to Kevin Wong, an assistant vice president at Quantum.

Principal Financial, an insurance company headquartered in Des Moines, Iowa, provided the refinancing for City Park Apartments, two four-story multifamily buildings located at 1246 and 1247 West 30th Street. Located two blocks from USC, the buildings feature a mix of two- and three-bedroom floor plans, Quantum said. On-site amenities include subterranean parking, and a combination fitness center and recreation room. Although not operated as traditional student housing, its proximity to USC has made it an attractive option for university students. The 129,902 square foot property was 99 percent occupied at the time of the financing, which closed in mid February.

Park City, which has owned the property since developing it in 1991, was seeking to refinance maturing debt with a 22-year fixed rate loan before interest rates increased, according to Wong, who arranged the financing. It replaces the previous loan from Fannie Mae, which had $12 million remaining.

“The historically high turnover rate from the student tenants, for what was viewed by many lenders as a typical multifamily project, was a major challenge,” Wong said in a press release. “However, by demonstrating the operational history as student housing and the long-term track record of high occupancy, we were able to secure an insurance company loan with a 22-year term at a fixed rate of 3.77 percent. In addition, we were able to secure a 60-day upfront rate lock on application, which protected the sponsor from rising interest rates that increased close to 40 basis points from application.” 

Wong told Commercial Observer, “the loan is definitely appealing looking at where current rates are at. With their spread calculated at today’s treasury rates, the current rate would be at 4.27 percent. They save 50 bps by rate- locking upfront, which is worth several million dollars over the course of their loan.”

Principal Financial did not respond to interview requests.


Source: commercial

Lotus Capital Arranges $237M in Financing for London Luxury Condo Project

A little over a year after its launch, Lotus Capital Partners has gone global and negotiated a $237 million (£170 million) financing for Belgravia Gate—a 12-apartment, 83,054-square-foot luxury condominium property in Central London—Commercial Observer has learned.

An affiliate of Apollo Global Management provided the condo inventory loan to Wainbridge, a private real estate investor, developer and asset manager of landmark properties in Europe and North America whose New York properties include 196 Orchard Street and 551 West 21st Street.

Apollo’s loan will be used to pay off existing construction debt—provided by a group of European lenders led by LetterOneand carry the project through the units’ sell-out period.

The transaction wrapped last Wednesday and the closing marks Lotus’ first deal in Europe.

“In arranging capital for this condo inventory deal, Lotus demonstrated its capacity to solve meaningful challenges for sponsors seeking development financing,” Faisal Ashraf, Lotus’ founder and chief executive officer, said in prepared remarks.

Originally built in 1867, the property is located at 11-15 Grosvenor Crescent in Belgravia, one of London’s  prestigious “Golden Postcodes”. Thomas Juul Hansen designed the building’s 12 luxury apartments, which include three townhouse-style apartments and two penthouse apartments.

Belgravia Gate is among the most expensive condominium properties in the world when measured by average apartment unit value, according to information provided by Lotus.

Apollo’s loan is collateralized by nine of those units (three of Belgravia Gate’s apartments were sold prior to the financing), giving each remaining unit an average listing price of £19 million ($26.5 million). One unit was pre-sold in Oct. 2015 for a whopping £32.5 million ($45 million).

Property amenities include direct, private lifts to each property, a spa, a fitness center, a 57-foot swimming pool and private meeting room facilities.

Wainbridge acquired the property in December 2013 from the Grosvenor Estate—a family-owned real estate investment firm with holdings throughout London—for £120.4 million ($167 million).

Westminster City Council approved Wainbridge’s plans to redevelop the existing office building into a super-prime residential property the same year. Construction began in June 2014 and is now in its final stages.

Lotus had to tackle economic uncertainty stemming from Brexit and the U.K. general election (in June 2017) while putting the transaction together. But, the firm utilized its knack for arranging and structuring capital in ways that reflect clients’ complex needs while navigating secular challenges that are unique to each individual project.

“The successful closing of this deal underscores our real estate financing expertise and market credibility among capital sources, both of which are required to arrange and execute on complex deals such as this,” Ashraf said.

New York-based Lotus has also been keeping busy on this side of the pond. Last October, the firm arranged $395 million in financing for the construction and recapitalization of Penn-Florida CompaniesVia Mizner—a 2-million-square-foot mixed-use project in Boca Raton, Fla. Mack Real Estate Credit Strategies provided a $315 million loan and the United States Immigration Fund provided an additional $80 million.

Since its launch, the firm has secured $1.5 billion in financing and it expects that amount to increase this year, Ashraf said.

Officials at Wainbridge and Apollo did not immediately return a request for comment.

Source: commercial

MetLife Lends $260M to Refi Midtown East Office Tower

Rockwood Capital has sealed a $260 million mortgage on Two Grand Central Tower, its 44-story office building in Midtown Manhattan, according to an announcement from Stroock, the law firm that advised on the financing.

Property records filed with New York City show that the lender is Metropolitan Life Insurance Corporation, whose debt will knock out a previous $200 million mortgage from J.P. Morgan from 2015 and add another $60 million in leverage.

Rockwood bought the 650,000-square-foot building in 2011 for $401 million, according to the latest deed on file. The tower, at 140 East 45th Street between Lexington and Third Avenues, is home to the New York City offices of Rockwood Capital itself, as well as financial and wealth-management firms like Cortec Group, Banorte Securities and BBR Partners. The General Services Administration—the branch of the federal government that manages government real estate—signed a ten-year lease for office space in the building that runs through mid-2023.

Representatives for MetLife, Rockwood and Stroock were not immediately available for comment.

Source: commercial

Deutsche Bank Lends $335M to Refinance Clipper’s Tribeca Apartment Towers

Clipper Equity has completed a $335 million refinancing on its adjacent pair of apartment towers in Tribeca, according to documents appearing in city property records today.

The mortgage, from Deutsche Bank, rolls over debt on the two buildings that Clipper had last refinanced two years ago. The New York City-based firm, which owns dozens of apartment buildings in New York and New Jersey, bought the complex, at 53 Park Place and 120 Church Street, in 2014 from the Sapir Organization for $560 million.

Until January, Clipper had been locked in a dispute against more than 40 tenants at the site who claimed that the company, steered by its founder, David Bistricer, had illegally deregulated apartments in the buildings that had been covered by the 421-g tax incentive program, as Commercial Observer previously reported. The incentive offers tax breaks to landlords who promise to keep units rent-stabilized for decades.

In July 2017, New York’s State Supreme Court sided with the tenants, but late last month, a higher panel in the Appellate Division overturned that ruling, declaring that Clipper had followed proper legal procedures to deregulate the building, and that the apartments were no longer subject to restrictions on rent hikes.

“It’s a significant decision for owners of buildings in Lower Manhattan for which they had received 421g benefits,” Rosenberg & Estis attorney Luise Barrack told CO at the time.

It was also surely a significant decision for Clipper, which doubtlessly leveraged increased tenant stability and an end to the legal uncertainty to lock in hundreds of thousands in bank debt before the Federal Reserve is expected to raise interest rates in March.

The building at 120 Church Street, a 21-story tower of more than 620,000 square feet, comprises 100 apartments, from studios through three-bedrooms, and hosts an outlet of the Schnippers restaurant chain on its ground floor. Its neighbor, 53 Park Place, is home to 106 units split between studios and one-bedrooms. Amish Market, a grocery store, leases 12,000 square feet at street level.

A representative from Deutsche Bank declined to comment, and officials at Clipper Equity did not immediately return a request for comment.

Source: commercial

Sterling Bay Seals $48M Bridge Loan for Talbott Hotel in Chicago

Mesa West Capital has finalized a $48 million bridge loan to refinance debt on the Talbott Hotel in Chicago, according to an announcement from the lender.

Sterling Bay, one of the Second City’s biggest developers and the organization behind office space in Chicago for Google, McDonald’s and Starbucks, bought the late-1920s structure in 2015 for $50 million and wrapped up an extensive remodeling of the property in the first half of last year. The five-year mortgage, which includes $7 million in mezzanine debt that Mesa West placed with another organization it declined to identify, will help fund the hotel while it gets re-established following the reconfiguration.

The four-star boutique hotel, at 20 East Delaware Place, houses 178 rooms and a 2,200-square-foot retail space on its ground floor that currently hosts a branch of the Danish food chain Joe and the Juice. On the southern edge of the Gold Coast neighborhood, the hotel is just blocks from the Michigan Avenue retail drag—as well as rivals like a Westin, a Park Hyatt and a Drake.

“At this part of the cycle, there is a little bit of oversupply,” admitted Matthew Snyder, who led Mesa West’s financing team for the deal. “That’s why some of the hotels are going the short-term bridge route as some of these markets continue to work through the supply. But you are seeing favorable traction, in terms of tourism year over year continually growing.”

The recent $20 million renovation emphasized a refreshed in-room design palette, with the installation of more modern light fixtures, marble window sills and new furniture. Joie de Vivre, the hospitality group that manages the Talbott, also rearranged the lobby, shifting the location of the check-in desk and adding cozier seating.

Representatives for Sterling Bay and Joie de Vivre didn’t respond to requests for comment.

Source: commercial

ACORE Lends $50M in Alabama Multifamily Refi

Crescent Real Estate, a Fort Worth, Texas-based investment fund, has nabbed a $50 million refinancing from ACORE Capital on a multifamily development in Hoover, Ala., Commercial Observer can exclusively report.

The five-year all-in mortgage knocks out existing debt on the complex, The Park at Hoover, and will fund renovations to the property’s clubhouse, fitness center and 69 residential buildings.

The loan was made on the basis of a property valuation of about $75 million, implying a loan-to-value ratio of 67%, according to a source with direct knowledge of the transaction.

The Park, at 2135 Centennial Drive, is about 10 miles south of downtown Birmingham, a city that has suffered consistent outflows of residents for nearly half a century. (After reaching a peak of 341,000 in the 1960 census, the population has declined in every decade since, down nearly 40 percent to 212,000 in 2010.)

Still, the suburb of Hoover offers apartment dwellers cheap rents and good public education, according to Lance Wright, an ACORE managing director.

“When we were presented with this opportunity, we felt that we knew the market well, and that Hoover was one of the better school districts” in Birmingham’s suburbs, Wright said. “This is going to be a less expensive option in a good school district, with a great sponsor.”

The Park’s tally of more than a thousand units helped ACORE get comfortable with the financing, according to Wright. That volume spreads Crescent’s $50 million debt down to $47,000 per apartment. Eighty-eight percent of apartments are now occupied, a number ACORE hopes Crescent will boost into the low 90s over the loan’s term.

Crescent acquired the complex in 2012. Today, 390-square-foot studios rent for $469 per month, and three-bedrooms of 1,500 square feet go for just under $1,000 a month.

A representative from Crescent did not immediately respond to a request for comment.

Source: commercial

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

RXR Scores $285M Mortgage for Midtown Office Skyscraper

DekaBank has provided a $285 million loan to RXR Realty for 1330 Avenue of the Americas, property records show. The loan replaces and consolidates previous debt on the property with a new $97 million mortgage.

In 2011, New York Community Bank provided a $200 million loan on the 40-story building, located between West 53rd and West 54th Streets. That debt supported RXR’s $400 million acquisition of the tower, which was built in 1965 and renovated ten years ago.

Tenants at the 534,000-square-foot tower include Silvercrest Asset Management, CKR Law, and the Robert Wood Johnson Foundation, a public-health philanthropy. Furniture company Knoll leases a substantial 50,000-square-foot space on the building’s first few floors for its flagship New York City showroom.

RXR’s 2010 acquisition of the property, designed by Emory Roth & Sons, culminated longstanding interest in the building from Rechler. The RXR CEO had long pestered 1330’s previous owner, Harry Macklowe, about its availability, and was finally able to put the deal together on short notice while preparing to attend his niece’s bat mitzvah, The Real Deal reported.

When Macklow owned the trophy asset, its $187 million mortgage was securitized in the Deutsche Bank-sponsored COMM-FL14 CMBS transaction. That loan was paid off when RXR purchased the building.

Representatives from RXR and DekaBank were not immediately available for comment.

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