guggenheim lends $150m for boston financial districtmoweekly.commercialobserver.com/12192014.pdf ·...
TRANSCRIPT
1 | december 19, 2014
The publicly held commercial mortgage pro-vider Ladder Capital will move toward elect-ing REIT status come Jan. 1, 2015, with the company’s board of directors unanimously vot-ing in favor of the move, the company disclosed this week.
New York-based Ladder said it would keep its focus on investments in senior secured com-mercial real estate assets, following the pro-posed election, with its conduit securitization business housed in a taxable REIT subsidiary. The company would make no changes to its business strategy or asset mix, according to the announcement.
“We believe this plan strikes a balance be-tween enhancing earnings to our share-holders and preserving the strong operating synergies we enjoy between our established
See Ladder... continued on page 3
Ladder Capital Climbs Toward REIT Status
The Insider’s Weekly Guide to the Commercial Mortgage Industry
Guggenheim Commercial Real Estate Finance lent $150 million to Oxford Properties Group for the purchase of a 475,303-square-foot office tower in Boston’s Financial District in a deal negotiated by HFF, according to a release from the broker.
This loan, the first long-term first mortgage from the Guggenheim Partners subsidiary, carries a fixed interest rate, an HFF spokesperson said. The permanent loan closed on Dec. 15.
Toronto-based Oxford, an investment man-ager for the Ontario Municipal Employees Retirement System, a pension fund for local government employees, acquired the property at 125 Summer Street as part of a larger office portfolio deal earlier this year.
In total, Oxford bought five office proper-ties from Blackstone Group for $2.1 mil-lion, marking one of the largest deals in the Boston market, as the The Boston Globe re-ported in May.
The four other properties included 100
High Street, 60 State Street, 225 Franklin Street and One Memorial Drive in Cambridge. Oxford partnered with J.P. Morgan Chase & Co. to buy the latter three.
The 22-story office tower at 125 Summer Street is located along the Rose Kennedy Greenway, one block from Boston’s South Station. The building’s tenants include the law firms Burns & Levinson and Sunstein Kann Murphy and the IT research firm Gartner.
The uniquely shaped property, which was completed in 1989, contains below-grade parking for 273 vehicles, a daycare center and a Starbucks.
“125 Summer is an institutional quality asset that is poised to benefit from its location in the Financial District, an area of the city that has seen an influx of more than 3,000 residents and is currently undergoing a transformation into a 24/7 neighborhood,” said HFF Senior Managing Director Riaz Cassum Cassum, who took part in the negotiations, in the re-lease. —Damian Ghigliotty
The LEAD
Guggenheim Lends $150M for Boston Financial District
Office Tower Buy
In This Issue
3 meridian brokers PNc Loan for The Adele
5 American development to build mixed-Use Project With $15m
5 Greystone closes First Freddie mac Small balance deals
7 Loan backed by Former Home of Lehman bros. defeased
7 AIG Finances LargaVista Project
7 d.c. Area Office Portfolio Transferred to Special Servicing
8 cIT Provides construction Financing for Pennsylvania Warehouse
9 American realty capital Provides $35m for Newark buy
“This week we are closing a land assemblage in
Gowanus and a value-add office deal in Seattle.”
—Jordan Roeschlaub From Q&A on page 12
2 | december 19, 2014
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Putnam PortfolioMultifamily Properties3,962 Units
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3 | december 19, 2014
business segments,” said Brian Harris, Ladder’s CEO, in a prepared statement.
“We continue to be well-positioned for op-portunities in both commercial real estate debt and equity investments,” Mr. Harris added.
Ladder is targeting annual cash distribu-tions of $100 million, which amounts to divi-dends of about $0.25 per quarter for each share outstanding. The timing and amount of future distributions is based on multiple factors, in-cluding the company’s future earnings.
The New York-based law firm Skadden, Arps, Slate, Meagher & Flom is advising Ladder in its push to become a REIT, a state-ment from Skadden said.
Ladder plans to seek a shareholder vote in the first quarter of 2015.
—Damian Ghigliotty
Ladder...continued from page 1
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Meridian Capital Group negotiated a $62.7 million Fannie Mae loan to New York-based Kahen Properties to refinance
The Adele, a luxury multifam-ily property in the East Village, Mortgage Observer Weekly has learned.
The 12-year loan, provided by PNC Real Estate, carries a fixed rate of 3.75 percent and 10 years of interest-only payments, fol-lowed by a 30-year amortization, according to the broker.
The 12-story Adele, located at 310 East 2nd Street, contains 105 market-rate units, 30 affordable units and 10,000 square feet of retail space occupied by a Duane Reade.
The property, formerly known as Alphabet Plaza, features a 24-hour door-man, valet service and a furnished rooftop terrace. The property was not renamed after the British pop sensation, a Kahen Properties representative confirmed.
“Meridian arranged the construction loan for The Adele in June 2013 and was able to leverage our familiarity with the asset and the strength of the sponsorship to quickly negotiate a highly accretive agency execu-tion that allowed the sponsor to capitalize on the value created in the development,” said Meridian Vice President Charles Grussgott, who negotiated the loan.
A PNC representative was unable to con-firm the financing. —Damian Ghigliotty
Meridian Brokers PNC Loan for The Adele
The Adele
MOW EXCLUSIVE
4 | december 19, 2014
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5 | december 19, 2014
The first loans under Freddie Mac’s new platform, which purchases and securitizes smaller balance mortgages, have closed, the
lender told Mortgage Observer Weekly.
The two loans, backed by apartment buildings in Los
Angeles, Calif., closed last week, according to a representative for Greystone, which orig-inated the $4.6 million on two apartment buildings.
Greystone beat out both Arbor Commercial Mortgage and Hunt Mortgage Group—the only two other lenders as of yet cleared to use the program—to close the first deals under the newly available platform.
Launched in October, as Mortgage Observer reported, the program targets multifamily loans between $1 million and $5 million on properties with at least five units. The loans have hybrid ARM or fixed-rates, are non-recourse and can have LTVs as high as 80 percent. The high leverage and significant in-terest-only period options make the product competitive with those of banks.
The loans just closed by Greystone were
a $1.9 million loan on a six-unit proper-ty near Overland Avenue and Venice Boulevard and $2.6 million on a 10-unit property near National Boulevard and the 405 Freeway. Both buildings are in West Los Angeles.
Greystone has high hopes for the product. “We worked closely with Freddie throughout the year, right up until [the product] was launched,” said Rick Wolf, a senior managing director at Greystone. “We thought we would put our money where our mouth was,” by also lending on the first deals with the program, he said.
Both loans were 20-year hybrid ARM, with a five-year fixed-rate period and 15-year float-ing rate period, based on a 30-year amortiza-tion, with one year of interest-only periods, according to Greystone.
“We want to increase the debt finance op-tions in this sector that is a rich source of affordable rental housing,” said Nashwa Moussa, senior director of Freddie Mac mul-tifamily, in a statement provided to MOW. “We look forward to closing more small bal-ance loans with Greystone.”
Greystone confirmed more deals under the
platform are in process.The program serves a slice of real estate
ownership that has been underserved in the past—owners who don’t have huge portfo-lios or stores of capital but still need to make repairs and renovations or just hold debt on their properties. In 2012, about 29 percent of the multifamily debt market was small bal-ance loans, with an average size of $1.2 mil-lion, a Freddie Mac release when the program launched said.
While Fannie Mae has had a small loans program for the past 12 years, according to Mr. Wolf, new entrant Freddie can provide short-er-term loans and those with higher leverage, under this platform. “Freddie has created a product pricing and proceeds profile that is competitive,” he said.
He said that five-year rates for loans under the program are in the mid-3 percent range and 10-year money is “in the fours and upper fours.”
“Fannie’s rate in the five years space is not as competitive,” Mr. Wolf said. “The Freddie product has taken some of what the small loan borrowers are used to with banks and put it into a GSE.” —Guelda Voien
Greystone Closes First Freddie Mac Small Balance Deals
American Development Group, the developer of a Park Slope residen-tial project, nabbed a $15.3 million con-
struction loan from the U.S. division of Israel’s Bank Leumi, Mortgage Observer has learned.
West Hempstead, N.Y.-based held ADG will build three townhouses, seven condominium units and a fully automated 45-car garage at the proj-ect at 346 13th Street. The deal closed Dec. 3.
The loan covers 70 percent of the acquisition and construction costs for the project, said a representative for Eastern Union Funding, which bro-kered the loan. It carries a floating rate of 3.75 percent over Libor, with a floor of 4.75 percent on the 30-month term.
Eastern’s Marc Tropp, Shai Romirowsky and David Singer nego-tiated the deal.
ADG is an active, privately held de-veloper and owner in Manhattan and Brooklyn.
The loan—for an unrelated car garage
and residential construction project—required a unique financing solution. “The cutting edge parking system … created complexity when we arranged this deal,” Mr. Romirowsky said. “We
were able to deliver, thanks to a sophis-ticated loan structure, and thanks to a promising vision from a client with 30 years in real estate behind him.”
—Guelda Voien
American Development to Build Mixed-Use Project With $15M From Bank Leumi
346 13th Street
MOW EXCLUSIVE
MOW EXCLUSIVE
6 | december 19, 2014
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7 | december 19, 2014
A securitized loan on a portfolio of Washington D.C. metropolitan area office buildings totaling $203 million was moved
to special serving this week for reasons labeled “other,” Mortgage Observer Weekly has learned.
The portfolio, known as Lafayette Property Trust, makes up 7 percent of the CMBS deal JPMCC 2007-LDPX, which has a current balance of $2.9 billion, down from an original balance of $5.4 billion, according to data obtained by Trepp and provided to MOW.
The borrower is listed in public records as Lafayette Buildings, LLC, which is indi-rectly sponsored by Lafayette Real Estate. (Lafeyette Real Estate is 30 percent owned by Duke Realty Corporation and 70 per-cent owned by Belcrest Capital Fund, an investment fund managed by Eaton Vance, according to Trepp.)
A remittance report shows that the spe-cial servicer, C-III Asset Management, is
reviewing the file and plans to schedule bor-rower meetings and site inspections before it engages counsel.
The portfolio’s net operating income for the first nine months of 2014 was $15.2 mil-lion. If that continues in the fourth quar-ter, the NOI will be on the decline for a third straight year. Net cash flow and debt service coverage ratio have all been on a downward trend since the loan was securitized in 2007, according to Trepp.
The not-for-profit research firm CNA pre-viously occupied 75 percent of the space at one of the portfolio’s properties, 4285 Mark Center Drive, but relocated to another of-fice in Arlington, Va., in June 2013, according to news reports.
The aggregate occupancy for the Lafayette Property Trust portfolio is now at 75 percent.
The borrower is “seeking modification in exchange for capital investment to re-tenant property due to existing vacancies,” the re-mittance report states. —Damian Ghigliotty
In the shadow of the recession, things did not look fantastic for 1301 Avenue of the Americas. Two tenants, Lehman Brothers and law firm Dewey & LeBoeuf, were casualties of the financial crisis (or, really, a cause of it, in Lehman’s case). And while the office building stands 45 stories in prime Midtown, it sits on a less than utterly prestigious strip therein: Sixth Avenue.
But fast-forward a few years and bond-holders behind the securitized loan on the tower, which was set to mature in 2016, can rest easy. The securitization, LBUBS 2006-1, was reported as defeased, ac-cording to data from Trepp released this week.
The $420.8 million loan is one quar-ter of the collateral backing the deal. With this defeasance—a process wherein spon-sors swap out a loan with treasury secu-rities that replicate the cash flows of the loan—one-third of the total collateral is now backed by U.S. government bonds, a Trepp alert said.
LBUBS 2006-C1 was also originat-ed by its notorious tenant, Lehman, in 2005. Paramount Group, a New York-based office owner, bought the building for about $1.5 billion when some of Harry Macklowe’s assets were sold off to settle
his debts in 2008.The Class A building, located between
52nd and 53rd Streets, boasts 1.8 million square feet of space and current tenants include Chadbourne & Parke, Credit Agricole and Barclays. More than 60 per-cent of tenants have an additional four or more years on their leases, info from Trepp shows.
As Mortgage Observer has reported, de-feasance is an increasingly popular mode of avoiding pre-payment penalties and locking in the current low interest rates for CMBS borrowers. Defeasance volume rose 123 percent to $13.2 billion from 2012 to 2013, according to research firm AST Defeasance. —Guelda Voien
Loan Backed by Former Home of Lehman Bros. Defeased
1301 Avenue of the Americas
D.C. Area Office Portfolio Transferred to Special Servicing
MOW EXCLUSIVE
AIG Finances LargaVista’s 300 Lafayette
American International Group pro-vided a $40 million mortgage to Brooklyn-based LargaVista Companies for the fee
simple interest in a develop-ment site on Lafayette Street in Soho, Mortgage Observer Weekly has learned.
The 20-year, fixed-rate loan was brokered by an HFF team led by Senior Managing Director Michael Tepedino and Managing Director Michael Gigliotti. HFF will also service the loan, according to the firm. The broker and borrower declined to name the lender.
The 11,622-square-foot site at 300 Lafayette, which is now occupied by a BP gas station, will be converted into a seven-story mixed-use retail and office tower in a joint venture with Related Companies. The site contains 365 feet of frontage along Crosby, Lafayette and Houston Streets.
LargaVista has owned the property for more than 30 years, according to Mr. Gigliotti. Related made a $7.5 million invest-ment in the upcoming development project in May, city records show. The total esti-mated project cost for the 83,000-square-foot development is $200 million, The Wall Street Journal reported in February.
“300 Lafayette is a highly visible and en-ergetic location,” Mr. Gigliotti said in a writ-ten statement sent to MOW. “The lender showed ingenuity in recognizing the value of such a site, despite the fact that the proj-ect has not yet broken ground. The im-pressive vision of the project, the excellent location, and the strength of the borrower combined to merit an attractive permanent financing.”
A representative for AIG did not return a request for comment.
—Damian Ghigliotty
MOW EXCLUSIVE
300 Lafayette Avenue
8 | december 19, 2014
New York-based CIT Real Estate Finance provided con-struction financing to the Dallas office and industrial devel-oper Hillwood Investment Properties for a 1.2-million-square-foot warehouse and distri-bution center in York County, Pa.
The debt totaled about $42 mil-lion, according to a third-par-ty source with knowledge of the deal. CIT declined to give the loan and total project amounts. A representative for Hillwood was not immediately available for comment.
The development, called Trade Center-83, is being built on 95 acres of land in the bor-ough of Manchester using tilt-
up construction. The completed industrial property will feature 50-foot-by-56-foot column spac-ing and 36-foot ceiling clear heights.
“The demand for Class-A in-dustrial property in Central Pennsylvania is very strong,” said Matthew Galligan, president of CIT Real Estate Finance, in a written statement.
“With demand significantly out-weighing the supply of investment-grade industrial product in New Jersey, big-box tenants are finding it more cost effective to locate to Eastern and Central Pennsylvania, and the market is witnessing many requirements over 1 million square feet,” he said.
The location of Trade Center-83 provides easy access to several interstate highways, including I-78 and I-83, accord-ing to Steve Reedy, manag-ing director of CIT Real Estate Finance. The proximity to those thoroughfares will make the fin-ished center attractive to fulfill-ment and distribution tenants, he said.
“The site is within a one-day drive of six of the 10 largest U.S. markets and 60 percent of Canada’s population,” Mr. Reedy said. “The site is also very prox-imate to vital service providers including UPS, FedEx and the Norfolk-Southern Intermodal.”
—Damian Ghigliotty
CIT Provides Construction Financing for Pennsylvania Warehouse
Site for Trade Center-83 in York County, Pa.
9 | december 19, 2014
Rugby Realty Co. has acquired of-fice building Three Gateway Center in Newark, N.J., with $35 million from American Realty Capital, a source told Mortgage Observer Weekly.
Rugby paid $42 million for the 579,000-square-foot building, the source said. NJBiz.com previously reported the sale, but did not provide the financial terms of the deal. The seller was New York-
based developer and investor Tahl Propp Equities, according to NJBiz.
The transaction underscores the vi-ability of the office market in Newark, which has seen economic strife in recent years. A 60 percent vacant office build-ing in almost any market could be hard to finance.
“The loan is structured to pro-vide funds for additional lease-up to
achieve stabilization,” the source said. Representatives for Rugby told NJBiz.com they plan to spend $20 million on improvements to the building, which was erected in 1985.
Ackman-Ziff arranged both the sale and the financing, according to the source, but the firm declined to comment to MOW. Calls to ARC and to Rugby were not returned. —Guelda Voien
American Realty Capital Provides $35M for Newark Buy
Cushman & Wakefield will pur-chase investment sales and mort-gage brokerage Massey Knakal
Realty Services in its entirety for about $100 million, the firms said this week, confirming
the initial Dec. 11 report by Mortgage Observer. A source with knowledge of the deal said the purchase should close on New Year’s Eve.
New York-based Massey Knakal had hired financial services firm Perella Weinberg Partners to sell either a 49 percent stake in it or the entire firm last month, according to previous reports.
C&W, CBRE and DTZ were reported-ly among the interested buyers. Massey Knakal’s principals Bob Knakal and Paul Massey were said to prefer to sell the non-controlling stake.
Massey Knakal has dominated the middle of the investment sales mar-ket, brokering a flurry of sales in re-cent years, particularly of properties offered for between $1 million and $100 million.
A November report about the planned sale said that Massey Knakal’s annual income was “in the $15 million range.”
C&W is a privately held company and the majority ownership stake is held by the investment group of the Agnelli family of Italy.
In the wake of the news, a number of executive shifts at C&W hit the wire.
John Santora was named CEO for North America. Mr. Santora most re-cently served as president and CEO of C&W’s corporate occupier and investor services group.
“Throughout his career, John’s suc-cess in a variety of managerial and op-erational positions with increasing authority and responsibility is due to
placing the upmost importance on orga-nizing services and driving solutions for the benefit of Cushman & Wakefield’s clients,” said Edward Forst, C&W’s president and CEO.
Mr. Santora takes over North America as Jim Underhill has left the firm to pursue other career opportuni-ties, a statement said.
The firm also hired Richard Womack from CBRE to lead its London West End capital markets practice. The hire fol-lows the appointment earlier this year of James Beckham from JLL to head the firm’s London capital markets team and James Crawford, who joined from Savills last year to head City of London capital markets.
“This and other key appointments are in line with our strategic plan to be the dominant player in major markets around the world,” said Digby Flower, C&W’s head of London market, in a statement. “Richard is without doubt one of the most respected investment agents in the market. We are now ex-tremely well positioned to significant-ly increase our market share in the London capital markets arena.”
Lake Success, N.Y.-based commercial mortgage brokerage Altman Warwick will grow their Long Island presence
and attempt to “pene-trate the Manhattan and New Jersey marketplac-es,” in the first quarter of
2015, the firm told Mortgage Observer Weekly.
The firm plans to hire an experi-enced managing director who will help
expand Altman Warwick’s debt and eq-uity products while building a bench of junior originators. Over the next year, the firm expects to increase the team by up to half a dozen members with sea-soned brokers as well as their more ju-nior counterparts.
Embattled American Realty Capital Properties, a prominent REIT whose value has plummeted since it disclosed accounting errors in late October, lost three executives, according to a report from Bloomberg News.
Nicholas Schorsch stepped down as executive chairman; CEO David Kay and COO Lisa Beeson resigned. William Stanley will act as chief ex-ecutive officer and chairman until per-manent replacements are named, Bloomberg said.
“The actions taken today will stabi-lize the company and are necessary to strengthen future leadership and strat-egy, improve governance, and com-plete a separation from Nick Schorsch and his affiliates,” Mr. Stanley said in a statement. “These actions build on ARC’s significant real estate assets and asset management capabilities, and will further restore investor confidence in ARCP.”
Silverstein Properties has named current chief investment officer Tal Kerret the company’s president.
Mr. Kerret joined Silverstein as an executive vice president in 2011; prior to joining Silverstein, Mr. Kerret helped launch two tech and media firms and served six years in the Israeli Defense Forces. He’ll now join the Silverstein executive team alongside Messrs. Silverstein, Burger and chief operating officer Mickey Kupperman.
WorkforceMOW EXCLUSIVE
MOW EXCLUSIVE
10 | december 19, 2014
2015 CalendarIssue Reservations Materials Issue Date
January 2015 12/23 12/29 1/7
Year in ReviewYear in Review
February 2015 1/15 1/19 1/28
CREFC, Life Companies
March 2015 2/12 2/16 2/25
The 50 Most Important People in Commercial Real Estate FinanceThe 50 Most Important People in Commercial Real Estate FinanceThe 50 Most Important People in Commercial Real Estate Finance
April 2015 3/12 3/16 3/25
Multifamily Lending
May 2015 4/16 4/20 4/29
Developers & Construction
June 2015 5/14 5/18 5/27
Retail/ICSC
July/August 2015 6/11 6/15 6/24
Mezzanine FinanceOpportunities in Europe
September 2015 8/20 8/24 9/2
Lawyer’s Issue
October 2015 9/17 9/21 9/30
Hotel LendingAsia
November 2015 10/15 10/19 10/28
Twenty on the Rise: Top 20 Brokers Under 35
December 2015 11/12 11/16 11/25
CMBSO ce Lending
11 | december 19, 2014
The Takeaway“CMBS delinquency rates took a steep decrease nationally and in New York last month following increases for both in October,” said Sean Barrie, a research analyst with Trepp. “With over $1.1 billion in loans being cured, and almost $700 in CMBS loans liquidated with losses, delinquencies were pushed to their lowest level in five years. New York City still has heavy multifamily loans anchoring their delinquency total, but seeing the national multifamily rate have the largest month-over-month decrease is certainly a positive sign.”
Source:
COMMERCIALOBSERVER.COM
Balance ($) Property 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
33,752,693 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
24,249,141 Cross Island Plaza Rosedale OF 90+ Days 20060810 20160811
16,638,194 Clarion LaGuardia Airport Hotel
East Elmhurst LO REO 20121221 20070124 20100201
14,756,322 110 West 32nd Street New York MU Non-Performing Beyond Maturity
20040818 20140901
9,754,599 4234 Bronx Boulevard Bronx OF 90+ Days 20070515 20170601
6,697,692 75 Spring Street New York OF Non-Performing Beyond Maturity
20040123 20140201
5,507,843 770 & 780 Garden Street Bronx MF REO 20091203 20121106 20070901 20170901
5,477,629 1500 Astor Avenue Bronx OF Foreclosure 20040714 20140811
4,624,631 47-30 29th Street Long Island City SS Non-Performing Beyond Maturity
20041025 20141111
3,720,000 2070-2074 Arthur Avenue Bronx MF Foreclosure 20050727 20150801
2,787,931 642, 646, 650, 652 Coney Island Avenue
Brooklyn MU Foreclosure 20140523 20061129 20131201
2,621,852 509 212th Street New York MF REO 20120702 20071101 20171101
2,599,701 47-16 Austell Place Long Island City IN Foreclosure 20050127 20150201
1,917,201 1735 Lafayette Avenue Bronx MF Foreclosure 20090422 20061121 20131201
1,890,549 3126 Coney Island Avenue Brooklyn MF Foreclosure 20130130 20050913 20121001
TOTAL: 3,448,695,941
12 | december 19, 2014
Q+A
Mortgage Observer Weekly: How did you get started in the real estate finance business and how old were you then?
Jordan Roeschlaub: While in col-lege, I spent two summers working for Joe Weston, one of the largest real es-tate owners in the Pacific Northwest. I painted, jackhammered, and did all sorts of labor. Apparently, Joe wasn’t too im-pressed with my work—kidding—as he told me to go to New York and get into real estate finance.
My first formal entry into the busi-ness was after college. I went to work for an insurance company making princi-pal investments with operating partners nationally.
You were hired by NGKF Capital Markets in September to lead its New York and Tri-State debt and structured finance team at 31 years old. How did that opportunity come about?
Early on in my career, on pitches, I al-ways acknowledged that I was the un-derdog for a mandate, but I told potential clients that if they supported my team and I, no one would work harder or be more loyal. I was fortunate that clients bought into this and took a chance on me. A few groups I’d done business with suggested that Jimmy Kuhn, NGKF’s president, and I connect. Jimmy is truly a legend and I was lucky that he was in the midst of dra-matically expanding the capital markets business. He’s been on a tear with acquisi-tions and the hiring talent to get us to the front of the pack.
Commercial mortgage brokers are constantly being asked if and when in-terest rates will rise. What do you tell your clients?
As a firm we do not take a stance on this, but many predicted rates would increase by the fourth quarter. Instead, we’ve seen them remain steady and even tighten. Going forward, considering rates have re-mained compressed for some time, a lot of people expect some widening. Even if there is widening it shouldn’t be dramatic enough to affect the flow or volume of cap-ital in the marketplace. To address interest rate concerns, we are advising clients on forward hedging options, defeasance and future funding commitments.
You’ve completed more than $2.75 bil-lion in capital markets transactions over the past 10 years. What deals are you and your team working on now?
It’s busy. We are out in the market with a lot of volume nationally. This week we are closing a land assemblage in Gowanus and a value-add office deal in Seattle. A lot of our NYC business is centered on new acquisitions and develop-ment financings. We have also planted a flag in Los Angeles, where we are working on a couple of exciting office buildings, on the Westside and Downtown.
I was recently tipped off about an inter-esting office tower deal in Salt Lake City that you closed earlier this month. Can you talk about that deal?
That was a wild transaction. I brought in Colony Capital to recapitalize South Temple Tower. The deal had a lot nuances as we de-feased an existing CMBS Loan, retired a preferred equity investment, and allocat-ed additional capital for significant reposi-tioning and lease-up. This was a competitive bidding process. Lenders were attracted to Salt Lake City, the business plan and the sponsorship.
What are your expectations for the in-dustry as a whole in 2015?
It will remain competitive. New capital con-tinues to enter the marketplace, to feast on the tsunami of maturities over the next few years. Capital sources are going up the stack. Watch for deals to be awarded based on structure rather than pricing.
Jordan RoeschlaubSenior Managing Director, NGKF Capital Markets’ Debt and Structured Finance Team
321 West 44th Street, New York, NY 10036
212.755.2400
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Jordan Roeschlaub