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Category ArchiveRobert Verrone

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

Chetrit Scores $170M Construction Loan for 255 West 34th Street

The Chetrit Group’s mixed-use hotel and retail development at 255 West 34th Street is one step closer to completion. Yesterday, the developer closed a $170 million construction loan for the project, sources told Commercial Observer.

Bank of the Ozarks provided the senior portion of the financing, with Melody Capital Partners and Arbor Commercial Mortgage chipping in for the mezzanine piece. The exact breakdown of the capital stack couldn’t immediately be ascertained.

Iron Hound Management Company’s Robert Verrone and Robert Vernicek negotiated the financing on behalf of the borrower, the sources said.

As previously reported by The Real Deal, Chetrit filed plans for a 300-room, 33-story hotel at the site in April 2016. The 170,000-square-foot development will include retail space on the ground and second floors as well as below grade. Property amenities are set to include a restaurant and lounge on the fourth floor, an outdoor pool on the sixth floor and a terrace on the seventh floor. Hotel rooms will start on the ninth floor.

Chetrit jointly purchased an assemblage of retail properties on the West 34th Street block with Cornell Realty Management in 2015 before the two firms parted ways and divided the assemblage, with Chetrit taking 243-255 West 34th Street and Cornell taking 257-255 West 34th Street.

Officials at Iron Hound and Bank of the Ozarks declined to comment. Officials at Chetrit, Melody Capital and Arbor could not immediately be reached for comment.

Source: commercial