$821M in 2005 Loans on From - Commercial Observermoweekly.commercialobserver.com/03202015.pdf · building from Rudin Management for $97.2 ... passu notes: a $290 million A-1 ... ordinate

1 | march 20, 2015

A group of investors led by Cammeby’s International Group borrowed $120 mil-lion from Ladder Capital, in a deal brokered by

Meridian Capital Group, to fund the purchase of 30 Park Avenue in Murray Hill, Mortgage Observer Weekly has learned.

The real estate giant, run by Rubin Schron, acquired the 20-story multifamily property from BlackRock and the California pension fund CalPERS for $194 million, a person familiar with the matter confirmed.

One of the other investors in the deal appears

See Meridian Brokers... continued on page 3

Meridian Brokers $120M Loan for Cammeby’s 30 Park Ave Purchase

The Galleria, a 2.3-million-square-foot mall that is Houston’s most visited attraction, has pre-paid $821 million in debt during an open prepay-

ment period, Mortgage Observer Weekly has learned.

A hefty portion of the debt was a CMBS loan that was con-

servatively underwritten, with a 47.5 per-cent loan-to-value ratio and debt service coverage ratio of nearly 2.73, according to data from Trepp.

Indeed, in January, the CMBS data service had warned that “if this loan can’t refinance, the entire CMBS market will be licking its wounds in 2015,” as the “wall of ma-turities” approached.

The borrowing entity is a joint venture com-prised of Simon Property Group, Walton

Street Capital and an affiliate of CalPERS, the nation’s largest public pension fund. The mall features hotels, retail anchored by four national chains and a private health club. Since the loan’s securitization in 2005, Walton has exited the asset, a representative for the firm said, selling the

retail to Simon in 2010 and the hotel por-tion in 2013.

It’s unclear if the current ownership has yet refinanced the mall, though it would seem likely, a source with knowl-edge of the market told MOW. Calls and emails to the representatives for the other borrowing entities were not re-

turned by press time.The prepaid financing consisted of a $580

The LEAD

MOW EXCLUSIVE

MOW EXCLUSIVE

See Houston Galleria... continued on page 5

“Ugait, cor in henim dit eum ent euguer in verate.

Ugait, cor in henim vullam nulput prat, sis

dit eum ent” —Name Here

From Name of article on page X$821M in 2005 Loans on Houston Galleria Mall

Prepaid

In This Issue

1 $821m in 2005 Loans on houston Galleria mall Prepaid

1 meridian Brokers $120m Loan for cammeby’s 30 Park ave Purchase

3 morgan Stanley Finances Feil’s Upgrades to Union Square Properties

4 Sapir Taps column Financial for mondrian Soho Purchase

5 New York Life Lends on Water Garden Office Buildings

6 amirian Group Gets Financing for West 21st Street Buy and redevelopment

7 Kessner Family acquires The highlands at rye With NYcB Loan 8 angelo Gordon and city center realty Nab $50m Bridge Loan on Vegas Office

8 New hampshire retail refis Through c-III commercial mortgage

“There is a definite slowdown

in the high-end condo market”

—Adi Chugh, From Q&A on page 12

The Insider’s Weekly Guide to the Commercial Mortgage Industry

2 | march 20, 2015

CAN YOURBROKER DO THIS?

535-545 Fifth AvenueNew York, NYTwo adjacent buildings

$310,000,000 10 FIXED-RATE BELOW 4.00%

-YEAR LOANCMBS LENDER

FULL-TERM INTEREST-ONLY

The Retail at 535 & 545 Fifth Avenue

Drew Anderman | Senior Managing Director 212.612.0236 | [email protected]

MOW – CYBDT - $310MM – 535-545 Fifth Avenue – D. Anderman – 3-20-15.indd 1 3/17/15 12:29 PM

3 | march 20, 2015

to be Joseph Sitt’s Thor Equities. If not, the sale may have been a quick flip, since Thor is cited in city records as purchasing the building for $179 million. If Thor did sell its full interest in the build-ing that fast, the firm made a $15 million profit in doing so. A company spokesman declined to com-ment, citing a confidentiality agreement.

The five-year, interest-only loan from New York-based Ladder has a fixed interest rate of 2.87 percent. Meridian Senior Managing Director Abe Hirsch and Vice President Akiva Friend negoti-ated the financing.

The 236,000-square-foot property, located on the northwest corner of Park Avenue and East 36th Street, contains more than 3,000 square

feet of ground-floor commercial space and a 142-space parking garage.

BlackRock and CalPERS had purchased the building from Rudin Management for $97.2 million in 2005, city records show.—Damian Ghigliotty

Meridian Brokers...continued from page 1

Morgan Stanley Finances Feil’s Upgrades to Union Square Properties

A group of investors led by Alex Sapir of the Sapir Organization took a $180 mil-lion CMBS loan from Column Financial to acquire the 263-room Mondrian Soho hotel at 9 Crosby Street in Lower Manhattan, public records show.

The billionaire real estate mogul and his partners purchased the financially troubled five-star hotel from Deutsche Bank at a foreclosure auction in January, as previously reported.

The recorded purchase price was $200 million. Both the acquisition and

financing closed on March 6, according to city records.

The Mondrian, which opened in 2011, was part of the Morgans Hotel Group until it went into foreclosure in 2013 with more than $250 million in unpaid debt.

The luxury hotel contains a restaurant, a 24-hour gym and a nightclub.

Mr. Sapir was not immediately available for comment. A representative for Credit Suisse subsidiary Column Financial de-clined to comment.—Damian Ghigliotty

Sapir Taps Column Financial for Mondrian Soho Purchase

Morgan Stanley provided a $50 million loan to the Feil Organization to cover re-cent upgrades to its two-building office and retail property at 841-853 Broadway in Union Square, according to records filed with the city.

The more than 260,000-square-foot office and retail property extends a full block be-tween 13th and 14th Streets.

Having completed renovations on 841 Broadway in 2013, the landlord is now in the process of renovating 853 Broadway’s retail base. That upgrade, which includes a new lobby and glass-curtain facade, is due for completion by the end of the month, a person familiar with the matter told Mortgage Observer Weekly.

Feil recently signed a 10-year lease with Capital One for 15,000 square feet of re-tail space across three floors of the 21-story building. The bank teamed up with a food re-tailer to roll out “a new store-within-a-store concept” at the roughly 260,000-square-foot property, that person said on the condition of anonymity.

The new Capital One lease covers about 4,000 square feet on the ground floor of 853 Broadway, 5,000 feet on the mezzanine level and 6,000 square feet below grade.

The Feil Organization also signed a 10-year lease for 2,600 square feet with Santander Bank at 841 Broadway last week, according to the person in the know. Two ground-floor retail tenants, Cosi and Cohen’s Fashion Optical, are relocating upon their lease expi-rations and Santander will take roughly half of the available 5,000 square feet of space.

Other tenants at 841-853 Broadway include MAC Cosmetics, Chelsea Hotels, Max Brenner, cloud services provider EMC and digital advertising software developer Centro.

Representatives for the Feil Organization and Morgan Stanley declined to comment. —Damian Ghigliotty

841 Broadway

30 Park Avenue

Mondrian Soho hotel

4 | march 20, 2015

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million senior loan that was split into three pari passu notes: a $290 million A-1 note included in the securitization, a $197 million A-2a note and a $93 million A-2b note (the latter two were not in-cluded in the securitization). The financing also included two other loans: a $111 million B-note (also not included) and, lastly, a $130 million sub-ordinate companion loan included in the securiti-zation as a non-pooled asset, Trepp analyst Sean Barrie said.

The securitized portion of the loans—$290 million—made up 16.75 percent of the JPMCC 2006-CB14 deal and was set to mature in December of this year, per Trepp data. The inter-est-only mortgage had a rate of 5.4 percent.

The mall, developed by local land-lord turned national real estate titan Hines, opened in 1970. Current anchor ten-ants include Neiman Marcus, Saks Fifth

Avenue, Macy’s and Nordstrom. Rents in the submarket average around $23 per square foot, according to loan docs.

According to loan documents, the mall boasts an indoor skating rink as well as 375 other stores, including a Prada—the only retail outlet for the Italian designer in all of Texas.

In February of this year, The Houston Chronicle reported that Simon was spending an estimated $250 million to revamp the luxury wing of the Galleria to retain top-shelf tenants.

While the rest of the market braces for the im-pact of the “wall,” the Galleria finds itself in an enviable position. The mall commands the re-gion in terms of ultra-luxury retail, which is one segment of the market that’s remained relative-ly healthy.

“With rates being low across the board, any attempt to refinance [the mall] would be a smart move,” Mr. Barrie told MOW.—Guelda Voien

David Amirian of The Amirian Group acquired a vacant, four-story building at 117-119 West 21st Street for $28.5 million, with plans to redevelop the brick-walled commer-cial property into luxury condominiums. The total project is estimated to cost $54 million, two people involved told Mortgage Observer Weekly.

Little Rock, Ark.-based Bank of the Ozarks provided a $30.5 million senior mortgage, ar-ranged by Richard Horowitz of Cooper-Horowitz, to help fund the acquisition and redevelopment. Mr. Horowitz also secured $6 million in mezzanine debt from a newly launched fund called Tall Pines Capital, while Manish Majithia arranged the equity.

“The gut renovation of this property into high-end condos will tap into the area’s strong residential market, where prices have esca-lated from $1,500 to $2,500 and $3,000 per square foot,” said Eastern Consolidated Vice Chairman and Principal Brian Ezratty, who brokered the sale. “Sales have skyrocketed in this neighborhood and The Amirian Group is perfectly situated to deliver an attractive, bou-tique offering along this great block.”

The acquisition closed on March 16. The seller is listed in city records as New York-based Alfa Development, which purchased the building in May 2013.

The site, which sits on the border of Chelsea and the Flatiron District, is comprised of 4,353 square feet of land and offers 44 feet of front-age. The property contains 38,612 buildable square feet, allowing it to be redeveloped into a single 12-story residential building featur-ing one townhouse unit, six full-floor units and two duplex penthouses, according to Mr. Amirian. Amenities at the new building will in-clude a doorman, storage space and five on-site parking spots, he said.

The New York-based design firm Grade Architecture is drafting plans for the redevel-oped property.

“We did not want to build the same prod-uct that has been seen over and over again,” Mr. Amirian told MOW. “We felt that a unique design and unique layout, providing full-floor apartments, with the opportunity to have park-ing would be special.”—Damian Ghigliotty

Amirian Group Gets Financing for West 21st Street Buy and Redevelopment

New York Life Real Estate Investors lent $260 million to refi-nance two six-story office buildings in Santa Monica, Calif., totaling 674,000 square feet, according to a company press release.

Institutional investors advised by J.P. Morgan Asset Management own the two buildings, known as Water Garden Office Park, Phase I.

Steve Kirk, senior director of loan originations in the lender’s San Francisco regional office, originat-ed the 12-year, fixed-rate debt. HFF Senior Managing Directors Mike Tepedino and Paul Brindley and Director Jennifer Keller arranged the financing.

The office park, which contains eight glass buildings totaling 1.27 million square feet and three levels of subter-ranean parking, was constructed in two phases. Phase I was completed in 1990 and Phase II was completed in 2000, ac-cording to the property’s website. The office buildings are located on 17 acres of land.

“Water Garden is a top-tier office park with excellent tenancy and is lo-cated in one of the strongest office mar-kets in Southern California,” Mr. Kirk said in a prepared statement. “We are pleased to add such an excellent quality property to our commercial mortgage portfolio.”

—Damian Ghigliotty

New York Life Lends on Water Garden Office Buildings

Water Garden Office Park

117-119 West 21st Street

Houston Galleria...continued from page 1

6 | march 20, 2015

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A partnership of City Center Realty Partners and investment advisor Angelo, Gordon & Co. received a $50 million bridge

loan on Bank of America Plaza, a Las Vegas office building.

The pair bought the 16-story Class A tower in 2010 for $64

million. The pair recently completed major improvements to the structure.

Prime Finance, an active debt fund that fo-cuses on transitional assets, provided the loan, according to broker CBRE.

Shawn Rosenthal, executive vice president in CBRE’s Midtown Manhattan office, and Bob Ybarra, vice president in CBRE’s Las Vegas of-fice, worked together on the transaction.

Bank of America Plaza, one of Vegas’ pre-miere office towers, boasts 270,234 square feet at 300 South 4th Street.

The office leasing market in Las Vegas has been slow to recover from the recession, ac-cording to market reports.

“The recovery has not been particularly sta-ble or powerful despite greatly improved em-ployment numbers,” reads a fourth quarter market report on Southern Nevada office leas-ing from Colliers International. Average ask-ing rates in the market in that period were a mere $1.90 per square foot, that report shows.

“The transitional bridge loan will be used to refinance existing debt and provide for future leasing costs to bring the asset back to stabili-zation,” said Mr. Rosenthal in a statement to Mortgage Observer Weekly. “The recent in-vestment in the lobby and ground floor retail, coupled with a strong improving market bodes well for the ownership and the future of this great tower.”—Guelda Voien

Angelo Gordon and City Center Realty Nab $50M Bridge Loan on Vegas Office

Meridian Capital Group negotiated a $30 mil-lion loan from New York Community Bank to help fund the Kessner family’s purchase of The

Highlands at Rye, a multifam-ily property in wealthy Rye, N.Y., Mortgage Observer Weekly can exclu-sively report.

The new owners acquired the asset from R.A. Cohen & Associates for $41 million on March 12, according to two people with knowledge of the transaction.

The seven-year acquisition financing from NYCB carries a fixed interest rate in the mid-3 percent range, two years of interest-only payments followed by a 30-year amortization schedule and a five-year extension option. Meridian Managing Director Tal Bar-Or negotiated the debt deal.

“We are pleased to have been able to work with Steve Kessner and Michael Kessner on the pur-chase of one of the best multifamily properties in Westchester County in addressing their needs in a complicated 1031 exchange,” Mr. Bar-Or said. “With this new ownership in place, the property will only improve and stand out as a best-in-class option for rentals in one of the most prestigious communities in the greater New York area.”

The Kessner family could not be reached for com-ment. Representatives for R.A. Cohen did not return requests for comment.

The Highlands at Rye is comprised of two four-story buildings totaling 108 units and 7,600 square feet of commercial space. The rental property, at 131-151 Purchase Street, was recently renovated.

Rye—the youngest city in New York State and one of the most affluent, according to U.S. Census da-ta—has two miles of coastline along the Long Island Sound. Rye ranked as the third most expensive city in terms of home prices in a 2010 Coldwell Banker report.—Damian Ghigliotty

Kessner Family Acquires The Highlands at Rye With NYCB Loan

The Highlands at Rye

MOW EXCLUSIVE

Bank of America Plaza

MOW EXCLUSIVE

8 | march 20, 2015

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REL Commons refinanced its retail portfolio with $16.5 million through C-III Commercial Mortgage, according to a

representative for Berkadia, which originated the loan.

The 10-year, fixed-rate loan is backed by three retail prop-

erties in New Hampshire which comprise the REL Commons portfolio: Spaulding

Commons in Rochester, N.H., Exeter Commons in Exeter, N.H. and Littleton Commons in Littleton, N.H.

Berkadia Senior Vice President Nick Cassino handled the transaction for N.H.-based landlord REL.

The properties’ major tenants include T.J. Maxx, Rite Aid and Planet Fitness.

“All three properties have a history of

strong occupancy due to excellent manage-ment and strategic locations,” Mr. Cassino said via email. “Using our access to various sources of capital, as well as our team’s deep knowledge of the Northeast real estate mar-ket and retail industry expertise, we were able to deliver an attractive loan with flexi-ble terms that addressed our client’s needs.” —Guelda Voien

New Hampshire Retail Refis Through C-III Commercial Mortgage

MOW EXCLUSIVE

Related Companies announced that Jennifer Tuhy has been named Chief Financial Officer of Hudson Yards. She will oversee all finance and accounting aspects of Hudson Yards, the largest pri-vate real estate development in American history.

Ms. Tuhy was previously a se-nior vice president in accounting and finance at Related, where she managed a 150-person organiza-tion responsible for overseeing all of Related’s accounting, reporting, budgeting and forecasting for de-velopment projects. She joined the firm in 2001.

Prior to her work with Related, Ms. Tuhy worked at Tishman Speyer Properties and PricewaterhouseCoopers.

She is a graduate of Bucknell University.

CBRE expanded its debt and structured finance practice to the greater Philadelphia region, the firm announced last week.

Steven Doherty was appoint-ed senior vice president and will lead the team. Based in the Wayne, Penn., office, Mr. Doherty has nearly 30 years of experience in commer-cial real estate financing. In his new role, Mr. Doherty will report to Mike Riccio, Senior Managing Director and Co-Head of Production, CBRE Capital Markets.

“Bringing Steve on board be-gins an exciting new venture here in CBRE’s Philadelphia region,” said CBRE Executive Managing Director Bob Walters in a state-ment from the firm. “Having al-ready established a solid debt team in our Pittsburgh office, we are now in a strong position to launch our Philadelphia practice.“

Mr. Doherty joins CBRE from Remington Investments, where he has spent the past three years as part-ner. Prior to Remington, Mr. Doherty spent 11 years at Berkadia as co-manager of the firm’s Philadelphia office, the statement said.

He received an M.B.A. from St. Joseph’s University and a bache-lor’s degree from the University of Pennsylvania.

Workforce

A T.J. Maxx, a Rite-Aid Pharmacy and a Planet Fitness

10 | march 20, 2015

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11 | march 20, 2015

The Takeaway“The big story coming from NYC last week was the sale of the Belnord Apartments for $575 million to HFZ Capital,” said Sean Barrie, an ana-lyst at Trepp. “The $375 million loan for the multifamily property was one of the largest pro forma CMBS loans issued in 2006, and the sale likely means the loan will pay off at par. The sale represents an epic turnaround for a loan that was sent to special servicer and, at one point carried an appraisal reduction of $134 million. In other pro forma/large apartment news, the Stuy Town pool was issued an appraisal reduc-tion for over $674 million this month. Two different stories for two similar loans…”

Source:

Balance ($) Loan Name City Prop. Type

Delinquency Status

FCL Start Date REO Date Origination

DateMaturity Date

3,000,000,000 Peter Cooper Village & Stuyvesant Town Pool

New York MF REO 20140603 20140603 20061117 20161208

225,000,000 Riverton Apartments New York MF REO 20090202 20100311 20061221 20120101

33,641,771 The Shoreham Hotel New York LO Foreclosure 20061101 20161111

31,000,000 1865 Burnett Street Brooklyn MF REO 20090227 20120629 20070215 20120301

30,000,000 300-318 East Fordham Road - A note

Bronx RT 90+ Days 20070301 20170311

25,699,964 1604 Broadway New York RT REO 20070329 20120401

24,249,142 Cross Island Plaza Rosedale OF 90+ Days 20060810 20160811

14,660,879 110 West 32nd Street New York MU Non-Performing Beyond Maturity

20040818 20140901

9,722,586 4234 Bronx Boulevard Bronx OF 90+ Days 20070515 20170601

6,651,818 75 Spring Street New York OF Non-Performing Beyond Maturity

20140714 20040123 20140201

5,507,843 770 & 780 Garden Street Bronx MF REO 20091203 20121106 20070901 20170901

5,444,518 1500 Astor Avenue Bronx OF Foreclosure 20040714 20140811

4,579,226 47-30 29th Street Long Island City SS Non-Performing Beyond Maturity

20041025 20141111

2,621,852 509 212th Street New York MF REO 20120702 20071101 20171101

1,917,201 1735 Lafayette Avenue Bronx MF Foreclosure 20090422 20061121 20131201

1,878,035 3126 Coney Island Avenue Brooklyn MF Foreclosure 20130130 20050913 20121001

1,520,030 166-33 Jamaica Avenue Jamaica RT Non-Performing Beyond Maturity

20041115 20141201

TOTAL: 3,424,094,862

COMMERCIALOBSERVER.COM

12 | march 20, 2015

Q+A

Mortgage Observer Weekly: How did you get your start?

Adi Chugh: My background is in in-vestment banking, and with a strong understanding of finance, I was able to recognize that many opportunities stem from distress. In 2008 and 2009, I began to notice many real estate op-portunities and a distress niche in the borrower community. At the time, I began arranging capital on very com-plicated transactions. Based on this experience, and along with Managing Partner David Rosenberg, I creat-ed Maverick Capital Partners in early 2011. We built our business on integ-rity and trust with our clients, ensur-ing that they would want to do business with us for the long run. In my experi-ence, I have learned that when you see people through the bad times, they want to include you and work with you in their better times, and we have seen that transition in the past 4-5 years.

Your firm has been described as “under the radar.” Can you tell us why you have taken that approach?

From the advisory firm perspective, we believe in customized solutions through a strategic and need-based approach. We want to attack multiple projects with the same clients, which allows us to grow or-ganically. By working with select clients, we have been able to build a solid track record and client trust that allows for referrals to new opportunities. We have been able to grow a successful portfolio through excellent results, rather than no-toriety, and have reached a point where we now feel comfortable discussing our success on a more public level.

What type of clients do you target?

Since I founded Maverick Capital Partners in early 2011, we have had a var-ied group of clients that we target and work with. Our focus has always been to optimize transactions throughout the capital stack. We currently have clients from all across the development spec-trum, from small boutique companies,

to some of the biggest players in New York City real estate. Our work includes individual deals ranging from $25 million to $1 billion.

What’s the most interesting deal you’ve worked on recently?

We have many exciting deals that we have been a part of and are currently working on. One of the most interesting deals we have worked on recently is a high-end condo construction loan at 172 Madison. Located at the northwest corner of 33rd Street and Madison Avenue, it was deal bought out of bankruptcy, and we were able to facilitate a quick closing on land acquisition. We were then able to arrange and advise the bor-rower on a high-leverage 85 percent plus LTC loan without having to dilute any of the sponsor’s equity.

What trends do you see in the mar-ket? Do you think there is a bubble in New York City?

Land values in Manhattan have reached almost unrealistic levels in sub-par loca-tions and that has led to lenders pulling back on the amount of leverage they are willing to provide. In addition, there is a def-inite slowdown in the high-end condo mar-ket, and it appears that this will be a trend for the foreseeable future. The good news is that the discipline of lenders will eventually help by placing downward pressure on land values, allowing borrowers to become more realistic.

Adi ChughFounder and Managing Partner of Maverick Capital Partners

Adi Chugh

321 West 44th Street, New York, NY 10036

212.755.2400

Guelda Voien Editor

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