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Category ArchiveSquare Mile Capital Management

Varsity Letters: Chris Lee and Matt Salem on KKR’s Debt Strategies

Global investment firm Kohlberg Kravis Roberts & Co. was founded in 1976—so the story goes—when Henry Kravis and George Roberts dined together at (the now defunct) Joe and Rose restaurant on Third Avenue between East 46th and East 47th Streets. Today, KKR has $168 billion in assets under management (as of Dec.31, 2017).

The firm has had a private equity real estate strategy in place since 1981, but more recently it is being recognized as an increasingly powerful force in the debt space,  too.

The firm has two debt strategies; KKR Real Estate Finance Trust (KREF)—an externally managed real estate investment trust (REIT) that originates senior commercial mortgage loans—and KKR Real Estate Credit Opportunity Partners (RECOP), which purchases junior tranches of commercial mortgage-backed securities.

“What takes several people years to build, in terms of size and breadth, they’ve accomplished in a couple of years,” said A.J. Sfarra, a managing director at Wells Fargo Securities. “They’ve raised a $1 billion B-piece fund and a mortgage REIT.”

KREF currently has a total market capitalization of $1.1 billion and a total portfolio size of $2.5 billion. It originated $1.5 billion of loans last year alone—$800 million in the tristate area—playing in the large loan, transitional and value-add space and competing with private lenders such as Square Mile Capital Management, Blackstone and TPG.

In November of last year, it raised a $1.1 billion fund for its RECOP strategy and is the most active buyer of CMBS B-pieces in the market, with an impressive 35 percent of market share. In 2017, it bought junior tranches on 12 deals, comprising $10.9 billion in principal balance. For all transactions,  KKR satisfied either a portion or the entire risk retention requirement, retaining $949 million in face value of the bonds.

Chris Lee and Matt Salem, the firm’s co-heads of real estate credit, lead KKR’s debt business from the company’s headquarters at 9 West 57th Street between Fifth Avenue and Avenue of the Americas.

A “frustrated Cowboys fan,” Lee hails from Dallas. After studying economics at Emory University he got his industry start with a summer internship at J.P. Morgan Chase Securities, which then led to him to join Goldman Sachs’ commercial mortgage group as an analyst in 1990. He remained there until 2009 when he moved to Apollo Global Management, then to KKR in 2012.

“I like the competitive nature of it, where you’re out competing every day against very savvy investors to create transactions,” Lee—who turns 40 next month—said of his draw to commercial real estate. “I also like the personalities in real estate. You meet a lot of colorful people, and it’s one of the industries where you continuously interact, whether on the finance side or the development side.”

Jeff Fastov, a senior managing director at Square Mile Capital Management, was co-head of lending at Goldman Sachs when the young Lee joined the bulge-bracket bank, and Lee’s first boss out of college. “His raw intelligence is immediately apparent, and he’s incredibly personable and well-liked,” Fastov said of his protégé. “So when you put these two [attributes] together he’s a formidable competitor because people really like to do business with him.”

Salem, 44, is also a New York City transplant. A Kansas City native (and die-hard Kansas Jayhawks fan), he studied economics at Bates College in Maine and—bucking the traditional route of most Wall Street programs—moved back home after college instead to seek employment.

After “being turned down a bunch of times,” by local banks in his hometown, Salem took a job at Midland Loan Services in 1996. Its platform was growing and it was hiring college kids to assist in its expansion, he recalled. Three years later, he took a position at Travelers Insurance—owned by Citigroup at the time—and moved to New York City. It was there that Salem was tasked with investing in high-yield real estate debt and early mezzanine loans, before segwaying—serendipitously, perhaps—into buying CMBS B-pieces.

When Citi sold Travelers, Salem tried the sell side out for size, working at Morgan Stanley, before joining Goldman Sachs in 2006 as a CMBS trader and ultimately running CMBS trading for the investment bank through the crisis. In 2011, he joined Rialto Capital Management to build out its performing businesses, including high-yield lending platforms—such as preferred equity and mezzanine loans—as well as CMBS B-piece investing.

mattandchris 149 Varsity Letters: Chris Lee and Matt Salem on KKRs Debt Strategies
Matt Salem. Yvonne Albinowski/For Commercial Observer

Meanwhile, over at KKR, Lee and KKR’s head of real estate, Ralph Rosenberg, were planning the next iteration of the firm’s real estate business.

“When I got here in 2012 we were figuring out where we wanted to start the business, so we started it in opportunistic real estate because we thought that would be the area we could differentiate ourselves the most,” Lee said. “The goal was to have an integrated business as a solutions provider where we could provide both equity and debt.”

KKR raised its first equity value-add fund—the $1.5 billion KKR Real Estate Partners Americas, or REPA—at the end of 2013. (“We bought a number of hotels in that fund as the hospitality recovery was starting to take hold,” Lee said. “So a lot of it was a buy-fix-sell strategy where we were buying assets that had broken capital structures or broken operations, fixing them then selling them.”) And it raised its $2 billion successor, REPA II, last year.

But Lee and Rosenberg wanted to further expand the business that KKR had evolved to include a credit business. They already knew that Salem was the man for the job.

“Matt had demonstrated the ability to lead and manage a team,” Lee said. “Rialto had a very active business across multiple products and we had very complementary skills. There was a view that we’d be able to do one plus one equals three if we put our different backgrounds together.”

Salem joined KKR, along with nine members of his Rialto team, in 2014.

“I thought it was an absolutely perfect move for him,” Sfarra said of Salem’s move to KKR, “and in way I couldn’t see him anyplace else. KKR is a world-class organization and he fits that mold perfectly.”

Since then, Lee and Salem have been off to the races, finding opportunity in the heightened regulatory environment and leveraging off KKR’s existing infrastructure.

“We both had a very consistent view of where the market opportunity was, and that was direct, transitional lending,” Salem said. “We didn’t think the banks were in a place to commit that capital anymore, and we thought that we had a different approach in being fully integrated into a global asset manager, and being able to draw not only from an experienced bench of private equity and credit professionals but also from those focused on real estate equity within our own team.

“We think like property owners and we can be flexible,” Salem continued. “So there was a great opportunity to commit capital both from a relative value perspective for our investors as well as differentiating ourselves in the market to our clients who are borrowers and property owners.”

KKR’s lending portfolio is heavily weighted toward office and multifamily assets (the opposite is true for hotels, which comprise less than 5 percent of KKR’s business) and it’s carving out a niche for itself in value-add plays in acquisitions as well as construction loan take-outs where leasing is taking longer than expected.

“We have tremendous range in our business,” Lee said. “This year we’ve quoted loans from $40 million up to $400 million and from Libor plus mid-200s to Libor plus 400. Borrowers are buying different properties and executing different business plans so being able to deliver a range of solutions across what they’re doing in their platform helps us to build that relationship and have more connectivity with them, as well as provide us with a better opportunity to prove our experience.”

Recent transactions include a $180 million loan on PIMCO and Zeller’s Fifth Street Towers—a 1.1-million-square-foot Class-A building in downtown Minneapolis. Like most of KKR’s loans, the deal included an initial funding component, in this case $130 million in upfront funding and $52 million in future funding. PIMCO purchased the building in 2015 and had implemented its business plan with some success but leasing was a little slower than expected and—midway through its business plan—it didn’t have access to additional capital to continue to lease the property. KKR stepped in, refinanced the existing loan and gave PIMCO the capital and runway to lease the building up further, closing the deal within three weeks.

The financing was arranged by Eastdil Secured, which has worked with KKR on multiple transactions.

“Chris can understand risks in a transaction very quickly,” said Grant Frankel, a managing director at Eastdil. “He’s very good at understanding the transactions where it makes sense to stretch, and which ones have the quantitative or qualitative intangibles that—as a lender—you may be willing to push a little harder on. He has a very good sense for that.”

Frankel said that the KKR team is easy to work with, too. “Chris and Matt’s originators are very collegial, very smart and they are all pleasant people,” he said. “They’ve built a really good culture. We [at Eastdil] have a similar culture from a collegiality perspective, so it works well.”

Closer to home, KKR made an inventory loan on the Zaha Hadid-designed apartments at 520 West 28th Street to Related Companies. The $200 million loan was collateralized by the property’s 30 remaining condos that were unsold at the time.

“It’s a very special project,” said Greg Gushee, an executive vice president at Related. “KKR quickly understood the structure, the value and our business plan and were extremely flexible in structuring something that would allow us to pursue that plan.”

Flexibility is one of Salem and Lee’s key selling points in making KKR stand out from the herd, Gushee said.  “Some lenders get very fixated on their loan documents when there’s a twist or turn in a deal,” Gushee said. “Chris just says, ‘Okay. Let’s see what makes sense to do here…’ He’s always flexible and open to doing what makes sense for the asset.”  

And, “they can come up with a structure very quickly, get a term sheet to you within days and they can close within 30 days, easily,” Gushee said. “[KKR is] the place to go if you want great execution. They look at the situation and they can customize the solution.” 

Like everyone else in the debt space today, KKR is having to compete with a variety of capital sources for deals.

“It’s competitive, we wouldn’t argue with that, but it’s still a relationship business and it comes down to how you can help your borrower achieve their goal,” Lee said. “A lot of our borrowers aren’t looking to finance a property that is already stabilized; they’re looking for help to execute a business plan. Because we execute a lot of these business plans ourselves we can be very constructive in helping them to solve a capital issue.”

And while relationships are important, so are the cost of funds—something that definitely works to KKR’s advantage.

“Being part of a global asset management firm is extremely helpful for us and we think we have top-tier cost of capital in terms of what we receive from our lending counterparties,” Lee said. “We also have other ways to enhance returns because we have access to different tools at our disposal in terms of the way we finance ourselves, through our capital markets team and our $45 billion corporate credit business. A lot of those synergies accrue to the benefit of our company, KREF, and its shareholders. But that’s how you compete—on borrower experience and on price.”

Salem sees KKR’s speed of execution as the biggest differentiator in its segment of the market: “We’re a small team and not as rigid as [other lenders] so you don’t have to go through layers and layers of investment committee approvals and bank processes to get things changed if business plans evolve,” he said. “Things change in these buildings and they need flexibility and a lender that’s going to be able to work with them through these changes.”

KKR’s other vertical in its debt business, CMBS B-piece buying, has Salem’s name written all over it as a veteran in the space. Most recently, at Rialto, Salem had led a dominant team in the space.

The opportunity was driven by Dodd-Frank and risk retention regulations in the CMBS fixed-rate conduit market, specifically the carve-out that allows banks to pass some of  their risk retention to a third-party purchaser. 

mattandchris 058 Varsity Letters: Chris Lee and Matt Salem on KKRs Debt Strategies
Chris Lee. Yvonne Albinowski/For Commercial Observer

“We thought it was a great opportunity because the banks weren’t going to want to hold that risk and we have the expertise to do it,” Salem explained. “We can create a retention vehicle with our relationships with like-minded, long-dated investors. Combining the institutional client base of KKR with our broad internal underwriting resources across private equity, corporate credit and real estate works well. We draw from all these resources and do all of the underwriting and diligence, which makes us very credible investors in the space.”

Sfarra has known Salem for 15 years. He first met Salem when he was at Citi and buying B-pieces from Wells Fargo. Sfarra hired Salem at Morgan Stanley and sold him B-pieces at Rialto and KKR. Additionally, Wells Fargo took KREF mortgage REIT public last year, leading the underwriting group. “He’s been a B-piece buyer, he’s been a colleague, he’s been a client and he’s a really good friend as well,” Sfarra said.

Further cementing their relationship, Wells Fargo also sold KKR its very first B-piece. “We’re really thrilled to support their business,” Sfarra said. “What they’ve done is built a really successful B-piece business in a really short period of time and the only way you can really do that is by having the capital to do it and by having great relationships. Their word is their bond so people want to transact with them and they’re very smart guys.”

Fastov met Salem when he was on the mortgage desk at Goldman Sachs. “He’s an incredibly smart guy, and very straightforward,” he said. “The B-piece business is one part real estate and one part capital markets which is why he’s so effective at buying CMBS B-pieces because you need both of these skills.”

And while KREF and RECOP continue to have success, so does KKR’s real estate equity business. The opportunity has evolved since 2011 from investing in broken capital structures coming out of post-crisis distress to more thematic investing, with KKR finding macro themes of interest and applying them through the real estate sector.

It also presents opportunities to lend to some of its competitors in the debt space.

Square Mile and KKR teamed up last June on a California office deal, with Square Mile providing a $92 million loan for KKR’s acquisition of 180 Grand—a 15-story, 279,000-square foot-office building located in the Lake Merritt submarket of Downtown Oakland.

“There was a lot of trust that we could deliver on the terms we offered and that we’d focus on what mattered in the transaction,” Fastov said. “When we agreed to do the deal together, Chris said, ‘Let’s stay in touch if there are any real issues in the documentation,’ and guess what? There were none. It’s an example of KKR doing a lot of different things, just as we are, and there are opportunities to be lenders to each other.”

Maybe it’s that out-of-state charm, but—as well as being highly respected deal counterparties—Lee and Salem are known for being all around good people and family guys.

Frankel describes Lee as “a good guy, smart and pretty cerebral. He’s a straight shooter and just a pleasant person you enjoy doing business with.”

“I get Chris’ holiday card every year and his kids are exceedingly cute. If Matt would send me his holiday cards I could comment there, but he doesn’t. So…that’s an issue,” Fastov said, laughing.

As for the future of KKR’s real estate credit business, “I think there’s a lot of growth ahead of us,” Salem said. “We’re one of the newer businesses at KKR. The firm views real estate and real estate credit as strategically important and a growth initiative, and so we’ll have resources and capital available to us to grow.” O.K., KKR.

Source: commercial

Michael Shah Talks His New Projects, Toledano and Why He ‘Loves’ This Retail Market

By now, Michael Shah’s origin story is well known in real estate circles. Twelve years ago, at the age of 28, the Harvard Law School graduate quit his gig at Midtown-based business law firm Wachtell, Lipton, Rosen & Katz after growing fed up with the demands of the job.

“I worked horrible hours, as all lawyers do,” Shah recalled. “I did not find it to be very fulfilling. You don’t get the chance to spend any of the money you’re making.” He spent the following six months “just partying in New York, going out every day and figuring out what I wanted to do.”

The Long Island native’s parents, both of whom were doctors, had invested in affordable housing properties in the city with their savings, providing Shah with some exposure to the nature of the real estate business. That, coupled with his own nous in the fields of business and law, meant that real estate proved an attractive opportunity for a smart young guy looking to reboot his professional life.

His first purchase was 1314 Seneca Avenue, a six-story affordable housing building in the Hunts Point section of the Bronx, which he bought for $6 million. “It was a true crack den, in every sense of the word—if you’ve seen New Jack City, it was the Carter building,” Shah said. Those kinds of outer-borough multifamily acquisitions represented Shah’s initial foray into the business, but in time, he began venturing into more ambitious segments of the market.

Today, the 40-year-old bachelor, who lives on Union Square West, oversees a diverse portfolio of New York City real estate assets approaching $1 billion in value, he said. His company, East Village-based Delshah Capital, owns everything from Meatpacking District retail properties, to Lower East Side apartment buildings, to a 1,100-unit federally subsidized housing complex in Staten Island.

Additionally, Delshah has established itself as a ground-up residential developer. Shah’s boutique Chelsea condo project at 221 West 17th Street, known as the Dorian, recently topped out after suffering a 2015 fire that set construction back a few years, and he’s also pursuing new high-end rental developments at 22 Chapel Street in Dumbo, Brooklyn, and 30 Morningside Drive in Morningside Heights (the latter being a conversion of five former medical buildings that Delshah acquired from Mount Sinai St. Luke’s hospital in 2016).

Shah recently spoke with Commercial Observer about those projects and more—including his firm’s venture into the Israeli bond market, his feud with troubled real estate investor Raphael Toledano and why he’s actually bullish on the retail market.

Commercial Observer: Looking at Delshah’s portfolio, you have a notably diverse array of investments in different types of properties. Do you feel that gives the firm an advantage, rather than just focusing on one asset class?

Michael Shah: It’s definitely an advantage, and there is a method to the madness. Some people just focus on certain submarkets. My personal investment philosophy is you’ve always got to remember real estate is cyclical, and depending on where the cycle is, there are different asset classes you want to be in.

At the top of the market, you want to be in debt, because people are paying more for assets than what they’re worth—so you want to be putting money out. At the bottom of the market, retail rents accelerate way more than residential rents—so if you feel like you’ve hit the bottom, you want to be heavier in retail, and office too. That’s how we pick what we’re in.

We also look at gentrifying submarkets: where people are moving, where we think they’re going to be moving, and where we think rents are going to grow.

You’ve recently increased your exposure on the Lower East Side, where you bought a walkup building at 138 Ludlow Street earlier this year for $19 million. Do you think that neighborhood still has a lot of embedded upside?

The Lower East Side is 100 percent gentrifying. I started investing there in 2007, and I’ve ridden the wave up. You have so many things happening there: Essex Crossing is coming online, and that Ludlow and Rivington corridor, where we bought 138 Ludlow, is maturing right now. I think there is additional upside.

I think the East Village still has upside. Greenwich Village and the West Village are two of the most desirable neighborhoods in Manhattan, so why wouldn’t the East Village a couple blocks over be? That’s where my friends hang out, that’s where some of the cooler bars are, that’s where people want to live.

image001 Michael Shah Talks His New Projects, Toledano and Why He ‘Loves’ This Retail Market
Rendering of Delshah’s Dorian condo project at 221 West 17th Street in Chelsea. Image: Delshah Capital

Let’s talk about some of the new projects you’re currently working on, like 30 Morningside Drive, 22 Chapel Street and the Dorian. Where do those projects stand, and what’s your investment thesis on those properties?

Thirty Morningside Drive will be a market-rate, five-building rental complex; the first two buildings are going to be delivered this time next year, and they’ll all be online by the end of 2019. The thesis is, you’ve seen SL Green do 1080 Amsterdam Avenue, Brodsky Organization [did 400 West 113th Street], and we think there’s demand for luxury product in that neighborhood that’s underserved.

Twenty-two Chapel is my first Brooklyn ground-up project. We’re supposed to close construction financing this month. It’s a very cool building; there will be a pool on the roof, which I think will be a very nice amenity, and a fitness center and lounge. Everyone’s seen what’s happened in Brooklyn over the last five years. It’s no longer a lower-cost alternative to Manhattan; it’s where people want to be instead of Manhattan. That building is also rentals, and 25 percent of the units will be affordable. We’re doing that under the new Affordable New York Housing Program.

We just topped out the Dorian and are going to start closings this September. That building is 45 percent [in contract]; one more unit would take it to 50 percent. Right now, between Chapel Street and Morningside, we have close to 450,000 square feet under development. I think we want to finish out these projects before we look at more development.

What are your thoughts on the Affordable New York program, and how does it compare to the previous 421a tax abatement that it was designed to replace?

Honestly, as a developer, the previous plan was more favorable for developers, but what the city is trying to do is smart. I think the city solves the affordable housing problem by giving people FAR [floor area ratio] bonuses to build affordable housing. Right now the law is that you get the tax incentive if you do a partially affordable building, which I think is great and it works. But I think what would be really good would be if you get an FAR bump—that way you keep all your market-rate FAR, can build the affordable and get the tax incentive.

Delshah has a good deal of exposure to the Manhattan retail market. I don’t have to tell you that it isn’t the easiest time for that market; what are your thoughts on the current state of retail real estate, and have you felt the downturn across your own portfolio?

I love it. We’re one of the few actively investing in retail right now. It’s a market that rose crazy fast from 2012 to 2015, and people always forget that rents don’t go up forever. With that asset class, market timing is very important. People are shying away from it, but we just picked up two notes on Manhattan retail assets from Signature Bank and may pick up a third. People bought vacant retail hoping to lease it up at huge rents, and they’re not because their whole investment was based on rents in 2015.

There’s a market for retail. The thesis is, stock markets are up, people feel wealthy, tax cuts are in place, there’s more disposable income, and retail’s been beaten to shit over the last few years. A lot of the pain was built into the pricing, but [companies] were reporting earnings and this was the best holiday shopping season we’ve seen in five years. When [rents adjust], you’ll see people signing new leases. If you’re a landlord with vacancy, it’s a hot retail market—as long as you don’t need 2015 rents.

But all my shit is leased. No bankruptcies; Restoration Hardware [at 55 Gansevoort Street in the Meatpacking District] is still crushing it, and Urban Outfitters [at 58-60 Ninth Avenue in the Meatpacking District] has very little debt anyway. We have good tenants.

You mentioned Delshah’s purchase of those retail notes; the firm has been particularly active in recent years in scooping up commercial mortgages and particularly debt that is nonperforming or on properties that have slipped into bankruptcy. How did you come to enter that market?

It’s a very active part of our business plan. I think a lot of people understand that buying nonperforming debt is a good strategy. What’s unique about us is that we’re not a purely financial purchaser; some people just buy the paper, but we’re very happy to own and reposition the asset because we’re effectively a real estate operating company. We’ve had tremendous success on all of them.

But those deals have also earned you enemies like landlord Raphael Toledano, who allegedly said he would “bury you” after you bought the note on his building at 97 Second Avenue. What did you make of that? [In November 2017, a federal bankruptcy court judge dismissed a lawsuit filed by Toledano seeking to block Shah’s acquisition of the property.]

The dude was imploding, and it was pretty clear vultures were going to pick his carcass dry, and I wanted to be one of them. From the time Madison Realty Capital made the loan [a $124 million mortgage on Toledano’s acquisition of a 16-building East Village portfolio], it wasn’t a question of if he was going to default—it was when. I think [Madison co-Founder and Managing Principal Josh] Zegen is going to do really well on that [portfolio].

I don’t really know how anybody in their right mind believed [Toledano] was going to out-litigate us; he’s not very litigation-savvy. I think it was a lot of noise and press—he’s a colorful guy. Before we did the deal, we had analyzed the litigation risk and knew how a bankruptcy would end, and it played out exactly how we planned. [Note: Toledano and his firm, Brookhill Properties, could not be reached for comment.]

michaelshah 461 Michael Shah Talks His New Projects, Toledano and Why He ‘Loves’ This Retail Market
Michael Shah at Delshah Capital’s offices in the East Village. Photo: Yvonne Albinowski/For Commercial Observer

Delshah is among a select group of U.S. real estate firms to have tapped the Israeli bond market via a publicly traded bond offering on the Tel Aviv Stock Exchange [the company has raised roughly $180 million to date in Israel, including a $50-plus million issuance last August with the expressed goal of financing 30 Morningside Drive]. What’s that experience been like thus far?

When I look back, that—along with Charlie [Oshman, founder of proptech startup Reonomy] coming on to be COO—have been two of the transformative things that have led to the company’s success. To become a publicly traded entity in Israel, you have to do a lot with organizational infrastructure, and I was a good real estate investor, but organizational design wasn’t something I spent a lot of time on. Charlie came over here, and now the company operates like a company and not just a deal shop.

It’s been very important to our trajectory; having access to that market allows us to do larger deals. We did our Series C offering for 30 Morningside, and here that money would have cost a lot more. It’s a great capital market. There’s a premium you pay when you’re a first-time issuer because the market doesn’t really know you, but this company was the perfect size for that market.

Related, Extell, those companies had larger issuances, but they didn’t pay attention to the market as much. Both Moinian and we looked at it not as a one-off but as a recurring thing for future growth. We have active investor relations programs; we go back to Israel when we’re not looking to raise money, we do a quarterly call after our earnings releases. That has gotten the market more comfortable with us.

How else do you finance your projects? With the growth of the alternative, non-bank lending sector in recent years, is that a segment of the financing market you’ve taken advantage of as banks have retreated from the realm of development lending?

30 Morningside was [financed] with Square Mile—we have a great relationship with them and CapitalSource. Bank of the Ozarks is doing the senior loan on 22 Chapel, and they were the acquisition financier for 30 Morningside. We’re still getting our deals financed; it’s just about how much leverage.

I think the real estate capital markets have matured a lot since 2009; since the credit crunch, alternative capital has stepped in to fill that void. It’s good for us because we tend to do complicated things. Historically, this company has used its own balance sheet [to finance operations], and this year one of the big initiatives for this company is to launch our own credit fund. We’ll be starting to lend on any asset class that’s based in New York.

You’re very much New York City-focused. Do you plan on increasing your exposure in any real estate markets outside of the city?

I think for the immediate future, we’ll be in New York [mostly]. I did buy a building in Miami recently—a corner building just outside of the Design District. We’re turning that into a 12,000-square-foot retail building.

And outside of real estate, you’ve also established yourself as a restaurateur.

I’ve got three operating restaurants and bars: Sons of Essex [on the Lower East Side], Petaluma [on the Upper East Side] and Leave Rochelle Out of It [on the Lower East Side]. They’re all in buildings that I’ve owned. I tried to do one at 200 Allen Street, but the Lower East Side community board feels they have a saturation issue [with bars and restaurants].

What was your motivation for entering the restaurant business? I feel a lot of people get into it so they can have a place where they can bring their friends and hang out.

That was never my motivation—though my dad did do that. It’s a tough business, and you have to manage expenses. I started doing it because I had vacant retail in 2009 and 2010; the thought process was, if we can put our own operating businesses in here, it’ll help pay rent. I definitely think we’ll end up with at least one more [restaurant] opening this year.

Lastly, do you still work out with Hamid Castro? [Castro, a personal trainer, was the subject of a 2016 New York Post article headlined “I Train Fat Rich Guys and Then Get Them Laid.” Shah featured prominently in the article, noting that he began training with Castro after hitting “a low point in my life.”]

Hamid and I are still good friends, though he’s not my trainer anymore.

Is exercise still a big part of your life?

Yeah, it’s basically my hour to myself every day to get into the mindset for what I’m trying to do at work. It’s a good way to start the day. And not being fat anymore is also a huge perk.

Source: commercial

Room for Improvement: The Value-Add Hotel Lending Space Is Heating Up

Hotels, like people, are sometimes in need of a little makeover.

Even more so in fact, given that an average hotel room has a shelf life of only seven or eight years before the cracks begin to show (quite literally) and its potential customers start eyeing its younger, shinier competitors down the street.

But, owners looking to give their property a facelift to boost occupancy and revenue per available room—whether through a renovation, a rebranding or a full repositioning—are in luck: The value-add hotel lending space has become increasingly competitive, which means lower costs of capital for borrowers and a myriad of capital sources eager to lend.

“It’s incredibly competitive out there, and it’s becoming more competitive,” said Matt Nowaczyk, a senior vice president in JLL’s hotels and hospitality group. “There was a tremendous amount of equity in the real estate space, and about 24 months ago those groups started putting their energies into mezzanine, preferred equity and senior lending instead.”

The wide bid-ask spread is part of the switch to the debt side. Sellers’ anticipation of higher purchase prices than the equity community is willing to invest has led to a slowdown in acquisitions and an increase in refinances.

“We’re not seeing a lot of trades in the market from an equity perspective. We’re finding better opportunities on the lending side because people are recapping existing deals,” said Greg Friedman, the CEO of Atlanta-based Peachtree Hotel Group, whose investment vehicles and funds are focused on investing in equity and debt positions on value-add hotels.

“There are a lot of new lenders in the space providing financing for transitional hotel assets,” Friedman continued. “You’re also seeing more collateralized loan obligations being formed that are financing these assets, in addition to private equity funds setting up a debt strategy.”

Debt fund capital is—by nature—value-add, and a lot of that capital is being raised by fund sponsors who have a knowledge of the hotel sector—providing the new competition with especially sharp teeth.

“Many [debt platforms] are sponsored by private equity firms who understand the product. I think it allows them to more competitively underwrite value-add executions,” said Daniel Peek, a senior managing director in HFF’s hospitality practice group. “The loans are a little higher leverage and a little higher cost, although the competition is actually keeping a lid on cost. It’s a very good market for value-add borrowers today.”

Also in the mix is the commercial mortgage-backed securities (CMBS) market. “The single-asset, single-borrower market has been strong for hotels for some time. Hotels are easy to underwrite as a single asset and easy to securitize,” Nowaczyk said. “CMBS has always been a very competitive product to the alternative lenders although CMBS lenders only play when the senior piece is in excess of $150 million—so whale hunting, really.”

Whale hunting indeed, but a CMBS execution creates additional competition for other lenders thanks to CMBS’ significant pricing power in providing higher leverage value-add loans.

A slowdown in demand and increase in supply, coupled with how late in the real estate cycle we are, meant that lenders and equity investors still proceeded with some caution last year.

Warren de Haan, the head of originations and a founding partner of ACORE Capital, said, “The investment sales market is a leading indicator of where people think the market is, and that dropped off significantly in 2017. But here’s the interesting point: The hotel market has done better than any of us thought and continues to do well—which is crazy, because we’re deep into the cycle and hotels are usually the most volatile asset class as their leases are up every night.”

But, lenders should be mindful of opportunities flowing from the slowdown in investment sales, de Haan said: “Just say you want $100 million [to sell] your hotel but you’re only getting bids at $85 million. Because the debt markets are so robust right now borrowers are saying, ‘Well let’s go to the refinancing market instead of the sale market.’ Borrowers will come to us for a 75 percent loan-to-value loan, but that loan is really an 85 percent loan to where someone would actually buy the property in today’s market. We [as a lender] have to be cautious when we get a loan inquiry, and ask, ‘Did it go through a sales process,’ and ‘Where were the bids?’ We have to make sure that the value is lining up with where the market clearing price for a sale would be so that we’re not overleveraging ourselves.”

So, why is the value-add hotel space so attractive right now? “A return premium at the internal rate of return level and a premium at the debt level,” Peek explained. “Generally, it’s a good market, and there’s an attractive yield out there.”

And, just as a stable asset appeals to certain investors and lenders, the ability to create value and reposition an asset is equally attractive to several capital sources today.

“We see an improvement in the stabilized loan-to-value in all of our assets as a result of new capital going in and rebranding,” de Haan said. “In a stabilized lending environment where the assets are stable, you don’t have that uptick because there’s no value-add story. But we love the value-add stories.”

Square Mile Capital Management has made 18 value-add hotel loans over the past three years. It defines “value-add” as assets that have some in-place cash flow but where cash flow is expected to increase over a period of time. The value-add component typically comes through making physical improvements to the property, through a property improvement plan (PIP), a renovation or a repositioning of the asset maybe through a rebranding or changing the franchise, or improving the management or operations of the property.

“Assets typically have an in-place debt yield of 7 or 8 percent but also have a business plan in place to get them to a double-digit debt yield over a 24- to 36-month period,” said Nolan Hecht, a managing director at Square Mile.

Square Mile’s loans typically have a five-year term with a 3-1-1 structure—a three-year base term for the sponsor to execute its value-add business plan with two one-year extensions.

When it comes to identifying an attractive value-add opportunity, Square Mile first looks to the quality of the sponsorship, Hecht said: “What’s their track record, have they done similar renovations or repositionings? Then we look at the feasibility of the business plan—what they’re proposing, does it make sense. Then we look at the asset quality and the local market dynamics.”

If those three considerations are strong, then Square Mile will lend 70 to 75 percent loan-to-cost on a hotel asset.

ACORE favors the whole loan approach in value-add lending, doing both the senior and the mezzanine part of the capital stack with an average loan-to-value of 65 to 70 percent.

“A typical inquiry would be a borrower asking for 65 to 75 percent of the cost of the purchase price plus 60 to 75 percent of capital that they need to invest in the hotel in order to reposition it,” de Haan said. “Once it’s repositioned and stabilized they typically go and sell the asset.”

A value-add hotel lending opportunity recently caught ACORE’s eye in Houston—a market hit hard by Hurricane Harvey as well as the lagging energy sector. “Have the full effects of Houston be felt? Probably not, but you have a Class-A hotel in a great location where the net operating income has been hammered, the asset needs money and the seller is selling it a fraction of replacement costs,” de Haan said.

Bolstering the asset’s story (ACORE is currently considering the deal, so de Haan couldn’t name the property) is its lack of direct competitive supply. “It will be very difficult to replicate and the cost would be way higher—$500,000 a key versus our borrower’s basis at $200,000 a key,” de Haan explained. “So that’s an interesting, risk-adjusted story. The cash flows could suffer for the next two years but fundamentally the value of the asset, coupled with a strong sponsor putting in new capital and upgrading the asset, will come back. And at our dollar basis it feels impossible to get hurt.”

While hotels comprised 25 percent of ACORE’s lending volume four years ago, that amount dipped to 15 percent in 2017, indicative of the caution around new supply outstripping demand.

An asset’s potential to compete with other properties in the area is key, de Haan said.

“We can look at a competitive set of assets and see that our hotel’s average daily rate and occupancy is at the bottom of these four hotels,” De Haan said. “Let’s say the other hotels have nicer features in their rooms than we do, nicer restaurants, but our location is very good—that’s a story I look for. Because if we replace the furniture, fixtures and equipment (FFE) in the room, if the borrower puts in a new restaurant concept and if demand exists in that market it’s not a stretch to think its rate and occupancy should be equal to—or better than—the comparable hotels. We don’t have to believe in the market, but if it improves, we exceed our underwriting significantly. But, we don’t bet on that—that’s a bet that the equity is making, not us.”

Speaking of equity, there’s a debate underway around whether having an equity side to your business is a positive or negative calling card in the value-add hotel lending space.

Square Mile has separate debt and equity platforms but—like others—has seen more action on the debt side recently. “We’re out hunting on both sides,” said Hecht, who believes that having both platforms is beneficial because Square Mile has an understanding of which value-add business plans make sense and which markets are attractive.

“If you have a deeper understanding of the minutiae, location, brand, manager, positioning, I think you can more effectively underwrite value-add financing,” Peek agreed.

Peachtree’s lending platform, Stonehill, is five years old, but Peachtree has been an equity inverstor in the value-add hotel space for 10 years. Friedman sees this as an advantage: “We can understand the credit and what’s happening; it allows us to do deals that are a little more difficult for other lenders because they may not have that knowledge.”

ACORE, on the other hand, doesn’t have an equity platform. De Haan sees ACORE’s position as a pure-play transitional lending shop as an advantage because the firm is not viewed as a threat.

“We’ve concluded that about 10 percent of the $5 billion in business we won last year was because we’re not viewed as competitors on the equity side,” de Haan said. “Those borrowers made the decision that they don’t want to share confidential information on their business plans with their biggest competitors.”

Some wary borrowers will strike a lender with an equity platform from the list of potential capital sources right away, Nowaczyk said. “That said, the capacity of some of those firms is significant, and it’s clear their business plan is making money off debt, not out of trapping guys and taking their assets,” he said.

Boston-based UC Funds provides both equity and debt. It recently made a $75 million direct equity investment in two adjacent hotels on Stamford, Conn.’s restaurant row; an existing Courtyard Marriott; and a half-complete Residence Inn. UC Funds picked up the two assets at a discount and intends to add value by managing both properties under one management company.

“This is a value-add situation where you can buy something unfinished and combine it with an operating hotel with shared resources and amenities,” Daniel Palmier,  the president and CEO of UC Funds, explained. “The Courtyard Marriott has a great valet service and pool. We took the opportunity when we bought the Residence Inn to expand the gym from 900 square feet to 1,400 square feet and we don’t need a pool because there’s already one at the Courtyard. So we’re adding value by operating these two hotels symbiotically.”

UC Funds began a PIP on the Courtyard Marriott six months ago, updating the FFE and lobby from its 2004 decor. The Residence Inn is now around 75 percent complete with hip furniture, a baby grand piano in the lobby, a modern bar and outdoor space on a mezzanine level in its future. “It’s going to be a really sexy hotel product,” Palmier added.

As a result of the renovation, “We’re going to cut cost on a room-by-room basis of around 30 percent,” Palmier said. “We now have one general manager for both properties, and we have one valet instead of adding another, so there are efficiencies across the board.”

There’s no doubt that a big-brand hotel name is preferred by some lenders.

“We love lending in the branded space, be it Hilton, Marriott or Hyatt. That will always be a high proportion of our lending business,” Hecht said. “But where it makes sense, we’ve also been lenders on strong lifestyle hotels in the right market. In general, it’s just easier for branded hotels to attract debt capital.”

Square Mile has made 10 loans on Embassy Suites hotels.

“These are 1980s or 1990s assets, and when they haven’t been renovated, they get tired and their market penetration drops down to 100 percent,” Hecht said. “So we’ve been doing loans for the renovations, for the PIPs and then once these assets are renovated the Embassy Suites typically spring back to 110 or 115 percent penetration. They are assets that are doing well—they just need a renovation to bounce back.”

For now, one capital source not competing quite so fiercely with those in the value-add space is the banks.

“An average bank is not going to do more than 50 percent [leverage] on a hotel,” Palmier said. “We go up as high as we feel comfortable. We’re not regulated, we’re a private capital provider, and because we understand the space and the intrinsic value, we can go up to 80 to 90 percent sometimes.”

But that’s not to say there isn’t room at the table for everyone, Friedman said: “I think this is a space where banks are becoming comfortable with allowing alternative lenders like us to fill the void. In some cases we’re partnering with regional banks and community banks who want us in as a participant with them, and we’re taking on that higher risk position in the loan.”

Source: commercial

Moinian Group Nabs $118M Square Mile, Bank of the Ozarks Loan for Dallas Office Tower

Square Mile Capital Management has provided a $118 million loan to The Moinian Group and SMA Equities for Renaissance Tower—a 1.7-million-square-foot office building in Downtown Dallas.

Square Mile brought in Bank of the Ozarks to take a senior portion of the loan, which will be used to repay an existing CMBS loan on the property and bridge the asset through stabilization.

HFF’s Whitaker Johnson and Steve Heldenfels arranged the financing on the dazzling tower, outside shots of which depicted the fictional home of Ewing Oil in the 1980s television series Dallas.

SMA Equities and The Moinian Group have owned the building since 2006. The previous loan was securitized in the Wachovia Bank-sponsored WBCMT 2006-C29 CMBS deal and split into a $64.5 million A-note and a $64.5 million B-note.

One of the tallest buildings in Downtown Dallas, Renaissance Tower sits in Dallas’ Central Business District. Its tenants include Hilltop Securities, Neiman Marcus Group, Dallas County and EY.

The Environmental Protection Agency also recently signed a 20-year lease for 229,000 square feet at the property, and the tenant is scheduled to move in December 2018. 

“We are excited to establish a lending relationship with SMA Equities and The Moinian Group on this transaction,” Square Mile Principal Matthew Drummond said in prepared remarks. “As Downtown Dallas continues to benefit from additional redevelopment and as evidenced by the recent signing of the EPA lease, Renaissance Tower is well positioned as a cost-effective alternative to other high-quality office buildings located in submarkets such as Uptown and Plano.”

“We received extremely competitive financing packages from multiple sources but ultimately closed with Bank of the Ozarks and Square Mile,” a spokeswoman for The Moinian Group told CO. “The terms gave us the flexibility we required to complete lease up of our Class-A office tower.”


Source: commercial

HFZ’s Laurie Golub Becomes COO at Square Mile Capital

Laurie Golub, formerly of HFZ Capital Group, will become the chief operating officer at finance and investment management firm Square Mile Capital Management, according to a press release issued by Square Mile today.  

Golub, who has more than 25 years of experience in the real estate industry, will officially start in her new role on Jan. 8.

“Square Mile has grown significantly in recent years as we’ve successfully diversified our investment strategies and capabilities,” Square Mile’s Chief Executive Officer Craig Solomon said in the release. “As we continue to execute our business plan, we believe now is the time to further enhance our already strong leadership team. Laurie’s extensive transactional background, outstanding relationships within the industry and proven business building skills make her the ideal person for this new role.”

Prior to joining Square Mile, Golub was the general counsel and COO at development and investment firm HFZ starting in 2012 and ending in July 2017, according to her Linkedin page.

She was responsible for all legal matters for HFZ and oversaw the acquisitions of numerous high-profile properties for the company’s luxury condominium projects. This includes The Chatsworth at 340-344 West 72nd Street, 11 Beach Street and 505 West 19th Street among others.

Before that she worked as general counsel and managing director of business affairs at Africa Israel USA from 2009 to 2012, as CO previously reported.

And prior to that she was an associate general counsel at Forest City Ratner Companies from 2004 to 2009. There she played a role in the pre-development of the $5 billion Atlantic Yards project and was also responsible for negotiating the acquisition of the New Jersey Nets, according to a press release from when she joined HFZ. She led the negotiations for the $400 million Barclays Center naming rights as well.

Golub got her start as an associate at Robinson Silverman Pearce Aronsohn & Berman in 1993 before moving over to Morrison Cohen Singer & Weinstein, where she represented clients involving real estate and corporate transactions.

Golub earned her law degree from New York University School of Law in 1989 and a bachelor’s degree in business and corporate communications from Boston University in 1986.

“I look forward to leveraging my background, experiences and relationships to add significant value to this exciting new growth opportunity as a senior member of the Square Mile team,” Golub said in a prepared statement.

Representatives from HFZ did not immediately respond for a request for comment.


Source: commercial

Square Mile Lends $133M on Former LA Times Printing Facility

Square Mile Capital Management has provided a $133 million loan secured for the acquisition and redevelopment of The Pressa 420,000-square foot creative office property redevelopment in Costa Mesa, Calif., Commercial Observer can first report.  

Invesco Real Estate and SteelWave recently acquired the propertyformerly a Los Angeles Times printing facilityfrom Tribune Media and Kearny Real Estate in an off-market deal. Square Mile’s loan financed the joint venture’s acquisition and will also fund construction costs and leasing costs to redevelop and stabilize the property, which is directly adjacent to SteelWave’s Hive project—a 180,000 square foot creative campus that is home to the Los Angeles Chargers‘ headquarters and training facility.

“We were especially drawn to this transaction by the opportunity to back two market-leading investors, developers, and operators who each bring recent, directly applicable experience to the table,” said Michael Mestel, a principal at Square Mile. “Between Invesco Real Estate’s highly successful redevelopment of Apollo at Rosecrans in El Segundo and SteelWave’s current project next door at Hive, this is the ideal team to unlock the site’s potential and deliver market-leading product.”

HFF’s John Rose, Todd Sugimoto, Patrick Burger and Olga Walsh negotiated the financing on behalf of the borrower.  

The site includes a 250,000-square-foot industrial building, a 112,000-square-foot office building, as well as an adjacent 4-acre site.  The immediate plan is to redevelop approximately 420,000 square feet of creative office space and retail—including a food hall, but the site allows for an additional 230,000 square feet in future development.

“We saw an immense potential in The Press and our vision is to redevelop the asset to be the single most significant creative office opportunity in Orange County, if not all of Southern California,” said Seth Hiromura, the managing director of acquisitions and development at SteelWave, in an announcement regarding the acquisition.

The redevelopment marks SteelWave’s first joint venture with Invesco and will be complete within two years.

“By combining the existing structure’s heavy industrial feel with Class-A creative office amenities and finishes, SteelWave and Invesco Real Estate are positioned to create a unique product that has thrived in markets like West Los Angeles and San Diego but doesn’t currently exist in Orange County,” Daniel Neumann, a vice president at Square Mile, said. “With an abundance of retail and recreational amenities on-site, The Press will create a true campus environment that we believe will be well received by prospective tenants.”

Jonathan Hastanan, a vice president of acquisitions and development at SteelWave, said the project also “pays tribute to the history of the building by embracing its character, making it unique to the region.”


Source: commercial

Square Mile Lends $136M on SoCal Multifamily Development

 Irving, Texas-based developer JPI has scored a $136 million loan from Square Mile Capital Management for Jefferson Platinum Triangle, a 400-unit multifamily property located in Anaheim, Calif., the lender announced today.   

JPI recently completed construction of the property’s four buildings and is nearing completion of the development. The loan pays down existing construction debt and provides bridge financing through the project’s stabilization.

“Square Mile Capital understands JPI’s mission and history of building multi-family housing communities that perform beyond expectations in today’s marketplace,” said Jason Spratt, a senior vice president at JPI. “JPI seeks out private, government and financial partnerships that share our corporate values, and endure the test of time. Square Mile is a great example of that.”

Jefferson Platinum Triangle is a residential community located at 1781 South Campton Avenue in Anaheim. Property amenities include two clubrooms, two pools, multiple barbecue grilling stations, a gym, a yoga studio and a dog wash station.

The city’s ‘Platinum Triangle’ is an 840-acre district that includes Angel Stadium, Honda Center and The Grove of Anaheim. Under the Platinum Triangle Master Land Use Plan, urban development is bringing mixed-use, office, restaurant, and residential projects to replace older industrial developments, according to city website Anaheim.net

“This transaction was a compelling opportunity to finance a trophy-quality multifamily asset in one of the fastest growing areas of the Los Angeles metropolitan area and Orange County,” Michael Mestel, a principal at Square Mile, said in prepared remarks. “The Platinum Triangle has undergone a dynamic transformation over the past market cycle, and Jefferson Platinum Triangle has been outperforming the surrounding market in terms of rents and leasing velocity since initial move-ins began earlier this year.”

Square Mile Principal Matthew Drummond added, “We are excited to close our first transaction with JPI, a top U.S. multifamily developer who consistently delivers market-leading product. We look forward to expanding our relationship with JPI on future developments going forward.”

An active multifamily developer, JPI has acquired, developed or is currently developing more than 331 projects.  In California and Arizona, JPI has developed and sold 28 multifamily properties totaling nearly 9,400 units at a total cost of roughly $1.6 billion.

Earlier this year, Square Mile provided a $71 million loan on another Golden State property—Jamison Services‘ 22-story, 415,000-square-foot Class A office building at 3600 Wilshire Boulevard in Los Angeles.

 


Source: commercial

The New Alternative: What’s Piquing Traditional and Nontraditional Lenders’ Interests

It’s not everyday that you spend your birthday with 250 industry friends, but if anyone should be placed on stage on his birthday it’s probably Simon Ziff. As moderator of Commercial Observer’s “The New Reality: Traditional Versus Nontraditional Lending” panel at CO’s Financing Commercial Real Estate Forum in Washington, D.C., on Tuesday, the president of Ackman Ziff was put to work refereeing a lively conversation between lenders from both sides, who discussed the opportunities that are drawing their dollars.

There’s no doubt that alternative lenders have filled a significant gap in the market, financing projects that banks won’t, or can’t, due to regulatory restrictions and capital requirements.

As a result, borrowers have a myriad of options to get their projects financed.

Norman Jemal, principal and senior vice president of Douglas Development Corporation (and the only borrower on the panel), said “There’s a lot of capital out there, it’s just a matter of finding the right vehicle.” Jemal said he sees tremendous appetite from lenders, essentially because the fundamentals are solid. “Lenders are hungry for loans,” he said.

Katie Keenan, a managing director at Blackstone Real Estate Debt Strategies, said that Blackstone is finding opportunities where the banks aren’t lending—construction loans, larger deals—and also in locations and sectors that are being negatively painted with a broad brush, such as Houston and retail. “When the fundamentals are good, we lean in,” she said.

One place Blackstone is leaning in, hard, is creative office redevelopments on the West Coast. Keenan said that the lender has an appetite for older, industrial buildings where the borrower has an interesting plan and vision to meet future tenant needs.

The High Volatility Commercial Real Estate regulation, part of the Basel III capital requirements, has certainly resulted in alternative lenders picking up the slack on construction loans. But, that’s not to say that traditional lenders aren’t making them, though.

Sadhvi Subramanian, the mid-atlantic market manager for Capital One, said that her bank is still active in the construction lending space—although its pricing has increased from last year. EagleBank has also done “ a lot of construction lending,” said Ron Paul, its chairman, with C-Class projects that can be renovated to B-Class properties piquing its interest.

Jeff Fastov, the senior managing director at Square Mile Capital Management, said that his firm will do value-add lending at 75-80 loan-to-value, jumping in where the banks leave off. When it came to the subject of pricing, Fastov said it changes depending on product.

And the panelists couldn’t discuss product type without discussing the sometimes-dirty ‘R’ word: retail.  

“We think that half of the [roughly 1,300] regional malls will go away. So the good news is that the other half will still be there,” said Fastov. Square Mile hasn’t shied away from the right retail opportunities. It provided a $19 million loan to RedSky Capital to refinance debt on a mixed-use property in Williamsburg (which included high street retail) in 2016l and was recently involved in a $20 million horizontal risk retention piece in the Del Amo Fashion Center near LAX airport—a 2.6-million-square-foot mall owned by Simon Property Group and J.P. Morgan Investment Management.

In terms of other asset classes, Square Mile also has a penchant for student and senior housing. “As long as we understand it from an equity standpoint, we’re happy to go lend on it,” Fastov said.

And although there are undoubtedly many alternative lenders fighting for apiece of the pie right now, Fastov said he feels that the competition is largely “held in check,” with not many new entrants in the mix. “The stability of the competitive set is very surprising to me,” he added. “It’s consistent—not overcooked with too much liquidity.”

That said, seeing as the big, commercial banks tend to have long-standing relationships with clients and rely on relationship-banking,  “either you’re in the in-crowd or you’re not,” Fastov said. “Unless [a borrower] wants more leverage than Wells Fargo is willing to give, we’re wasting our time.”

Whether you’re a traditional lender, an alternative lender or a borrower, we’re “walking into a period of caution,” said Paul, and even a little hiccup in the market could cause some pain. He advised that caution be exercised in the product borrowers are buying, and the loans that are made.

Keenan said the real change to be aware of is how people are using space. “People got caught flat-footed with Amazon,” she said, referring to the e-commerce giant’s monopolization of the retail sector, and the world (it seems).  Even though most of the loans Blackstone provides have 3 to 5 year terms, the goal should be to stay ahead of the game and address tomorrow’s demand.

In addition to another trip around the sun, Ziff has plenty to celebrate. Ackman Ziff recently closed three construction deals in a week, including a $163 million student housing deal at Temple University in Philadelphia (with an alternative lender), a $125M speculative office transaction in New York City’s meatpacking district and the financing of a mixed-use project in New Jersey  (with three more deals added to the pipeline last week, Ziff said). A very happy birthday, indeed.


Source: commercial

Square Mile Lends $91M on Booming Philly Suburb Office Space


Source: commercial

Square Mile Lends $71M on LA Office Property


Source: commercial