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Category ArchiveRefinance

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

NYCB Provides $89M Refi for Two NoMad Office Properties

Kew Management has received an $89 million refinancing package from New York Community Bank for the Townsend and The St. James—two office properties located in NoMad, property records show.

Meridian Capital Group’s Allan Lieberman negotiated the financing, which consists of a seven-year, $33 million loan with a fixed-rate of 3.875 percent and a five-year, $56 million mortgage with a fixed-rate of 3.265 percent.

“With low interest rates available near the same levels as their soon-to-be-maturing loans on the buildings, Meridian advised Kew to structure a recapitalization,” Lieberman said in prepared remarks. “We were successful in providing Kew’s management with a strategy that accomplished their short- and long-term goals.”

The Townsend is a 12-story, 97,300-square-foot office property located at 1123 Broadway and The St. James is a 16-story, 156,000-square-foot office property located at 1133 Broadway. Both buildings were erected in 1896 and are located on the same block between West 25th and West 26th Streets.

Following a previous refinance in July 2013—also provided by NYCB—the properties underwent a capital improvement program, signing new tenants including restaurant La Pecora Bianca and a Rizzoli bookstore.  

“Allan and Meridian have provided invaluable counsel to Kew as we have enhanced our own portfolio and helped make NoMad a vital part of New York’s economy,” Leslie Spira Lopez, the president and CEO of Kew Management said. “They have both the expertise and vision to make Kew’s properties and New York ever greater places in which to do business.”

A spokesman for NYCB declined to comment.

Source: commercial

Mesa West Originates $165M Refi of Two San Diego Apartment Buildings

Mesa West Capital has originated $165 million for San Diego-based Sunroad Enterprises to refinance two San Diego, Calif. luxury rental complexes, Mesa West announced today.

The five-year, non-recourse and first-mortgage financing was split into two pieces, with Mesa West keeping a $145 million A-note and New York-based investment manager Clarion Partners keeping the remaining $20 million on its books, according to a news release from Mesa West. The deal closed December 19.

“With Clarion, we had a conversation with the borrower to bring in a partner, and leverage was important to the borrower,” Mesa West Vice President Jason Bressler, who told Commercial Observer. “We identified Clarion as being active in multifamily in Southern California. HFF really helped us figure out the parameters borrower was looking for, and Clarion was a natural fit to get the execution the borrower wanted.”

ariva apts courtesy mesa west capital Mesa West Originates $165M Refi of Two San Diego Apartment Buildings
Ariva Apartments at 4855 Ariva Way in San Diego. Courtesy: Mesa West Capital

The debt is backed by Ariva Apartments and Vive on the Park, located at 4855 Ariva Way and 8725 Ariva Court, respectively, in Kearny Mesa, a suburb of San Diego.         

“We continue to be bullish on multifamily,” Bressler said. “It’s an asset class, in whole, that’s always going to bounce back very quickly. These properties are brand new and are very high quality and what each benefits from is they are in a central location with certain demand drivers.”

Ariva Apartments is comprised of 253 rental units within two four-story buildings. Construction was completed in 2014 and the building was fully occupied within 16 months of opening, according to a press release from Mesa West. The complex includes a cardio and strength playground and assigned, underground parking.

Monthly rents for Ariva range from $1,815 for 595-square-foot studios to $2,700 for a 1,241-square-foot, two-bedroom pad, according to the property’s website.

The seven-story Vive on the Park was constructed June 2017 and is home to 302 units. Amenities include a pool and spa, a fitness center with multiple stories, rooftop lounges with barbeque pits, social areas with sand fire pits, a business center, a clubroom, a game room, a social club and on-site dry cleaning.

Monthly rents at Vive on the Park range from $1,835 for a 546-square-foot studio to $3,530 for a 1,409-square-foot, three-bedroom apartment.

“The sponsor has done an excellent job in leveraging the portfolio’s quality finishes, high-end and diverse amenity offerings and central Kearny Mesa location in the lease up of these two projects in a very competitive market,” Mesa West Principal Steve Fried, who led the origination team with Bressler, said in prepared remarks. “We are confident in their ability to maintain the strong leasing velocity to meet the demand for this type of product in one of the most rapidly developing pockets in San Diego County.”

Ariva Apartments and Vive on the Park are the two most recent residential developments for Sunroad’s planned 40-acre community called Sunroad Centrum, which will surround the nearby Centrum Park and will be included as part of the Spectrum Technology Center—the redevelopment of the former 232-acre General Dynamics aerospace facility—in Kearny Mesa. Once completed, Sunroad Centrum will include 1,622 multifamily units and approximately 856,000 square feet of commercial office space, according to the release.

HFF Senior Managing Directors Tim Wright and Aldon Cole—out of the firm’s San Diego office—arranged the financing. Wright and Cole did not immediately respond to a request for comment. Sunroad Enterprises could not immediately be reached.

Source: commercial

Citizens Bank Lends $58M on DC Rentals, Citing Hot Market in City’s Northeast

Douglas Development has secured a $58 million bridge loan to refinance its construction debt on Brookland Press Apartments, a freshly-built rental complex in Washington, D.C., according to an announcement from Citizens Bank.

The Providence, R.I.-based lender is providing the two-year loan just as the twin-building site, located at 806 Channing Place NE, is beginning to find renters. Financing for the construction of the 295-unit development came from an undisclosed D.C.-area bank, but Citizens took that lender out as Douglas aims to lease the building before transitioning to a longer-term mortgage.

The financing is further supported by mezzanine loans from Guggenheim and Hunt Companies, though officials at Douglas and Citizens declined to provide further details. Representatives from the two mezzanine lenders did not return requests for comment.

Jordan Klinger, finance director for Douglas Development, talked up the project’s affordable pricing and its location within the city as assets to potential tenants.

“We’re a block from the Metro, across the street from Rhode Island Row“—a newly redeveloped retail strip—”and we’re right on the Metropolitan Branch trail,” Klinger said, citing a popular local jogging route. “Northeast D.C. as a whole has been a growing market, and a lot of new housing deliveries have been done there. But we’re happy with where we are.”

Tim Leon, Citizens Bank’s regional vice president of commercial real estate, shared that enthusiasm for the burgeoning D.C. neighborhood.

“As growth moved into the city east from the Capitol Building, older neighborhoods have become growth areas for the city,” Leon said. “Major retailers have come into this market in the last couple of years, and there are new restaurants and bars. It’s really becoming a desirable place to live.”One of the two six-story buildings, which Douglas christened the Foundry, was originally constructed as a printing factory in the 1920s. The other building, known as the Forge, was newly built, and the two are connected by a one-story common space whose roof doubles as an outdoor courtyard shaded by the apartment structures. Amenities include bicycle storage, an exercise facility, and an outdoor swimming pool.

Source: commercial

ACORE, LaSalle Provide $105M Refi for Nashville’s Tallest Residential Tower

Nashville, Tenn.-based developer Giarratana has secured a $105 million refinance for 505— a mixed-use luxury tower in downtown Nashville, Commercial Observer has learned. ACORE Capital provided a $80 million first mortgage, while LaSalle Property Fund provided a $25 million mezzanine piece.

JLL Chicago’s David Hendrickson brokered the 60-month loan, which refinances a $93.9 million construction loan from Bank of the Ozarks as well as previous $37.6 million mezzanine loan from LaSalle Property Fund.

The 45-story, 550-unit luxury skyscraper at 505 Church Street is Nashville’s tallest residential tower at 543 feet tall. Its amenities include a salt water swimming pool, a tennis court, a fire-pit lounge, a bocce ball court and a dog park.

The upper 16 floors of the building house 193 condos, while the lower 29 floors contain 350 apartments. The property also includes one acre of amenity areas and 10,000 square feet of retail.

ACORE and LaSalle’s refinance is specifically for 505’s low-rise apartment component. Arkansas-based Simmons Bank is financing the high-rise condo component with a $40 million loan. Tony Giarratana, the founder and president of Giarratana, told CO that he expects to sell all 193 condos in the first quarter.

Giarratana has owned the property since 1993 and built several residential towers around the site since then. “Pre-recession, I had planned to build a 70-story tower at the site, but the great recession scuttled those plans,” Giarratana told CO.  He revived 505’s development plans in 2013 to include a 60-story residential and retail tower. The plans were approved but financing was only available for a 45-story tower at the time. “We would have been happier at 60 but we’re thrilled at 45,” he said.

Giarratana decided to refinance the property’s construction loan early as his previous loan agreement did not allow for the sale of condos. The construction loan was set to mature in Dec. 2018 but had two one-year renewal options. A lock-out was in place until Dec. 2, 2017 and the refinance closed on Dec. 15.

Today, 505 is the tallest residential tower in Nashville, and it would be the tallest overall if it weren’t for the antennas on the city’s AT&T building.

“This was a complicated deal because of the condo element, which was not part of the collateral,” Lance Wright, a managing director at ACORE, told CO. “We moved quickly over the holidays to get it closed but this deal really checked all the boxes: a top-notch, local sponsor, best-in-class trophy building with everything a resident could ask for and more, one of the hottest markets in the U.S. from an employment growth and population growth standpoint. It’s a great property.”

A spokeswoman for LaSalle did not immediately return a request for comment.

Source: commercial

TIAA Refinances RXR’s 75 Rockefeller Plaza With $300M Package

Scott Rechler’s RXR Realty refinanced its headquarters at 75 Rockefeller Plaza with a $300 million package from pension fund Teachers Insurance and Annuity Association of America (TIAA), according to records filed today with the New York City Department of Finance.

The stack includes a $92 million mezzanine piece, sources told Commercial Observer, and it refinances two previous J.P. Morgan Chase loans, totaling $184 million, from Sept. 30 2014 and another $23.7 million loan provided by the bank on Nov. 1, 2016. TIAA rounded out the transaction with a new $280,000 gap mortgage. The package was provided by TH Real Estate, an affiliate of global investment manager Nuveen, which is the investment arm of TIAA.

J.P. Morgan assigned the debt to TIAA and it was then split into two portions—$148.6 million and $59.4 million. The $148.6 million loan is comprised of a $83.5M A-note and a $65.1 million B-note while the $59 million is the combination of four notes—$23.7 million, $4.8 million, $30.6 million and the new $280,000 gap mortgage.

RXR, which controls the 32-story building through a 99-year, triple-net ground lease, completed a $150 million renovation of the building and reopened it in February. The firm has moved its headquarters from 1330 6th Avenue into a 14,000-square-foot space on the 14th floor of the tower—with an alternate address at 15 West 51st Street, between Avenue of the Americas and Fifth Avenue. 

“TH Real Estate is pleased to add the most modernized office building in Rockefeller Center to our portfolio and to continue our existing relationship with a premier property owner in RXR Realty,” Michael A. Lembo, a senior director at TH Real Estate, told CO.

Commercial Observer reported in February that brokerage Cushman & Wakefield leased 40,000 square feet of retail space to American Girl and 185,343 square feet to Bank of America and Merrill Lynch Wealth Management (an arm of the bank) as the anchor tenant of the 623,000-square-foot building.

Most of the ground floor and the entire retail basement is occupied by American Girl, but there is a remaining 5,000 square feet on the ground floor, which features up to 24-foot ceiling heights, as CO previously reported.

Erste Group Bank AG, a Vienna, Austria-based financial services provider, has leased the entire 12th floor—14,000 square feet of space—as CO reported in August.

Officials at RXR declined to comment on the transaction.

Source: commercial

Atrium Health Wraps Up $50M Refinancing for NJ Senior-Care Campuses

Atrium Health & Senior Living has secured a $50 million loan to refinance a group of senior-care facilities in New Jersey, according to an announcement from Newmark Knight Frank, which arranged the financing on behalf of the borrower.

NKF declined to identify the lender, but sources close to the deal named New York-based Stabilis Capital Management as the institution responsible for the loan.

The debt takes the form of a short-term financing that will function as an interim loan before a longer-term financing can be arranged from the Department of Housing and Urban Development, an instrument known as a “bridge-to-HUD” loan, according to NKF.

“This transaction to facilitate the refinancing of this portfolio is a win-win scenario,” Jordan Roeschlaub, who co-led NKF’s team for the transaction along with Dustin Stolly, said in a statement. “These facilities are crucial to the Princeton community and the residents that depend on them, so we are thrilled to have facilitated the refinancing for an excellent owner and operator such as Atrium.”

The pair of campuses, at 1000 Windrow Drive, in Princeton, and 38 and 40 Freneau Avenue, in Matawan, comprise four buildings with 450 units or beds. Atrium provides a mix of assisted living, skilled nursing and memory care—that is, healthcare for those with degenerative illnesses like Alzheimer’s disease.

Daniel Fromm, who was on the NKF team, said that it wasn’t difficult to find a willing lender to refinance what he described as an outstanding facility.

These facilities are “the best in class, the gem, the crown jewel in this market, and the sponsor [Atrium] is top notch,” Fromm said in an interview. “That’s the most important thing.”

Requests for comment to Atrium and Stabilis were not returned.

Source: commercial

Hudson Companies Closes $92M Refinancing for Brooklyn’s Parkline

Hudson Companies has refinanced a $72.7 million construction loan at The Parkline in Prospect Lefferts Gardens, Brooklyn with $91.8 million in permanent financing provided by California-based Union Bank, Commercial Observer has learned.

Today’s deal was structured as a direct purchase of bonds issued through New York State Housing Finance Agency‘s 80/20 housing program—the city program of tax-exempt financing for developers who make 20 percent of their units affordable, Greystone Bassuk’s Drew Fletcher, who arranged the financing, explained.

“This is the first time Union Bank has purchased HFA bonds in New York,” Fletcher said.

Alison Novak, a principal at Hudson, said that now that the project has been stabilized, the firm was seeking higher leverage. “We wanted to stick with the bond financing so we selected Union Bank because they had the best terms,” she said. The interest rate on HFA bonds is typically lower than for conventional financing.

The October 2013 construction loan was a private placement of state housing bonds purchased by Citibank and expiring in 2020, Novak said. The refinancing replaces that loan with 10-year debt from Union Bank carrying an interest rate just above 3 percent.

Hudson acquired what was a development site at 626 Flatbush Avenue in June 2013 for $11 million, as CO previously reported, and erected a 23-story, 254-unit residential rental building, of which 51 apartments are affordable. The structure was constructed to meet LEED Gold and Energy Star standards. Construction concluded in September 2016, and leasing was completed this spring.

The building includes a full floor of amenities on the top floor, “so even if you have a studio apartment on the second floor and your view isn’t that spectacular you feel like you own a piece of the sky. You just go upstairs,” Novak said. The top floor houses 24/7 tenant lounge, roof deck with barbecues, party room and private chef’s kitchen. There is a playroom on the first floor off the courtyard, a dog washing station in the basement, a screening room on the second floor and a gym on the third floor. Gross monthly market-rate rents range from $2,300 for a studio to $4,500 for a three-bedroom apartment.

The building houses the Maple Street School, Greenlight Bookstore and by the summer of 2018, a 2,300-square-foot neighborhood restaurant and bar.

Robert Rengifo led the Union Bank team. A company representative didn’t respond to a request for comment.

Source: commercial

Broad Street Development and Invesco Recap 80 Broad Street, Valued at $235M

Broad Street Development and new equity partner Invesco have completed a $235 million recapitalization on 80 Broad Street, between Stone and Marketfield Streets, according to an announcement from BSD. The rebuilt capital stack consists of an assumed $102 million first mortgage from AIG, an additional $30 million in mezzanine debt from the insurer and a fresh equity contribution from Invesco, representing a controlling stake in the building.

BSD purchased the 423,000-square-foot office tower in 2014 for $173 million with the help of the AIG mortgage, along with preferred equity from RXR Realty and Colony Capital. The addition of new financing from AIG and Invesco effectively removes that previous pair of preferred equity partners from the deal, the BSD statement says.

Four years remain on AIG’s original seven-year mortgage, set for payoff in 2021.

“We are reinvesting in Downtown Manhattan in a major way,” Raymond Chalme, the CEO of BSD, said in a statement. “We believe in this asset and the market, and we know that working with…Invesco, we can make further improvements to 80 Broad Street so it can achieve even greater success.”

Chalme’s firm is actively exploring other opportunities to work with the Atlanta-based investment management company in New York City, he added.

The 36-story building in Lower Manhattan is host to a handful of multifloor tenants, including law firm McGivney & Kluger and the interior-decorations outfitter The Robert Allen Group, but the majority of companies who lease space in the building occupy less than 5,000 square feet each. That focus on smaller lessors is by design, David Israni, a BSD senior managing director, told Commercial Observer.

“We were big into having some smaller users here,” Israni said. “The floor plates lay out quite well for smaller [tenants].”

Competing buildings in the Financial District have cleared out entire floors to try to attract major, 20,000-square-foot tenants in recent years, Israni noted. That trend has slashed the supply available for small office tenants that want access to the neighborhood’s dense network of subways and transit options—especially technology and media companies that might be new to the area.

During the three years BSD has operated the building, it has been able to increase rents on some floors. “It’s just a flight to quality Downtown,” Israni said.

Proceeds from the new capitalization will go towards a refresh of the lobby and the building’s elevators. Tenants already have access to a bike room and a conference space, and more amenities are on the way, according to Israni.

AIG and Invesco did not immediately respond to a request for comment.

Source: commercial

Wells Fargo Provides $80M Refi for G-Holdings’ LIC Resi Tower

Wells Fargo has provided an $80 million loan to New York-based G-Holdings Corporation to refinance Aurora, a 30-story luxury residential building located at 29-11 Queens Plaza North in Long Island City, Queens, according to records filed yesterday with the New York City Department of Finance.

The Dec. 7 financing replaces $80 million in previous Wells Fargo debt—including two building loans and a project loan—that closed in December 2013 and funded construction of the project.

Wells Fargo split the debt into three substitute mortgages, the first being a $43.3 million advance in funds to the borrower—which was then assigned to Transamerica Financial Life Insurance Company, a private holding company for several life insurance and investment firms. The company is a subsidiary of Aegon N.V., a life insurance company headquartered in the Netherlands. Aegon acquired Transamerica in 1999.

Built in 2016, the property is located between 29th Street and 41st Avenue with 132 rental units above a 160-key Marriott Courtyard hotel that opened in May. Monthly rents for the apartments, which are on floors 15 through 29, range from $2,650 for one-bedrooms to $4,200 for two-bedrooms, according to the property’s website.

A representative for Wells Fargo did not immediately return a request for comment. Officials at G- Holdings could not immediately be reached for comment.

Source: commercial