P. 1
Mortgage Observer 0312

Mortgage Observer 0312

|Views: 2,111|Likes:
Published by NewYorkObserver

More info:

Published by: NewYorkObserver on Mar 26, 2012
Copyright:Attribution Non-commercial


Read on Scribd mobile: iPhone, iPad and Android.
download as PDF, TXT or read online from Scribd
See more
See less





APRIL 2012

The Insider’s Monthly Guide to New York’s Commercial Mortgage Industry

Q&A: the M.O. chats with Ackman-Ziff’s

Simon Ziff

Lending Powerhouse

M&T Bank Plus:
Top Large Deals Top Smaller Deals Monthly Mortgage Charts and more

On CIT Group’s New Real Estate Finance Challenge

Matt Galligan
Power Profile:

Relationship Driven. Execution Focused.
Recent Commercial Financing Highlights

Columbus Square
New York, NY 500,000 SF Retail Portfolio

U.S. Steel Tower
Pittsburgh, PA 2,200,000 SF Office Property

1551 Broadway
New York, NY 25,600 SF Retail Property

Hotel Chelsea
New York, NY 175,900 SF Hospitality Property

Balance Sheet Financing


Conduit Financing


Conduit Financing


Balance Sheet Financing


North Elston Avenue
Chicago, IL 178,700 SF Shopping Center

West 14th Street
New York, NY
61,000 SF Mixed-Use Property

Steelworks Lofts
Brooklyn, NY 110,000 SF Mixed-Use Property

Route 17 North
Paramus, NJ 125,000 SF Retail Property

Balance Sheet Financing


Balance Sheet & Mezz Financing

Construction Financing


Balance Sheet Financing


In 2011, Meridian proudly advised on nearly 2,800 real estate financing transactions. Over our 20-year history, Meridian has earned the trust and confidence of the market, becoming a leading advisor to many of the world’s most sophisticated real estate investment firms.

New York Office 1 Battery Park Plaza 26th Floor New York, NY 10004 Tel: 212-972-3600 Fax: 212-612-0100 New Jersey Office 485 Route 1 South Building F, Suite 110 Iselin, NJ 08830 Tel: 732-301-3200 Fax: 732-301-3299 Florida Office 2385 Executive Center Dr. Suite 400 Boca Raton, FL 33431 Tel: 561-367-0005 Fax: 561-367-0099 Illinois Office 8170 McCormick Blvd Suite 220 Skokie , IL 60076 Tel: 773-439-1200 Fax: 773-439-1299 California Office 2029 Century Park East Suite 1400 Century City, CA 90067 Tel: 310-867-2300 Fax: 310-867-2350 California Office 2173 Salk Ave. Suite 250 Carlsbad, CA 92008 Tel: 858-964-0300 Fax: 212-201-5141 Maryland Office 7600 Wisconsin Avenue Suite 800 Bethesda, MD 20814 Tel: 240-507-1919 Fax: 410-504-5748


2 4 12 14 16 20 24 26 28 29 30 31 32

Editor’s letter news exchange work force Originations
The Mortgage Observer’s picks for 5 deals over and under $30 million

321 West 44th Street, New York, NY 10036


Jared Kushner, Publisher

Barbara Ginsburg Shapiro, AssociAte Publisher

Robyn Weiss, Director of reAl estAte

Jotham Sederstrom, eDitoriAl Director

m&t bank
The secrets behind M&T’s lending might

Carl Gaines, eDitor

Dan Geiger, Daniel Edward Rosen,

stAff Writers

power profile Q&A

CIT’s new real estate finance division

Sam Chandan, Joshua Stein,


The M.O. chats with Simon Ziff

The scheme of things
Peter Lettre, Photo eDitor

Monthly mortgage charts Stein’s law the basis point
Michael Stoler on insurance companies

Mark Stinson, Designer

Lisa Medchill, ADvertising ProDuction

in-depth look

Christopher Barnes, PresiDent,

observer meDiA grouP

the schedule
Barry Lewis,

of interest

executive vice PresiDent,

observer meDiA grouP

Cover photo by Hannah Mattix



Editor’s Letter

Spring’s Here

Might Optimism Follow?
So welcome to The Mortgage Observer. Stick around and stay a while. We’re dedicated to bringing you all the commercial real estate finance news happening in the New York tristate area, with a focus on tracking and diving down deep into recent mortgages— that’s our mission. As we head further into spring, it’s easy to feel optimistic and ready to start something new with vigor. The weather’s warmer, the flowers are blooming, the sun sticks around later… Well, optimism regarding the economy and what our collective financial recovery means for commercial real estate seems to be in bloom once again, too. No doubt uncertainties still loom, but several of the stories we’re bringing you this month attest to this. For instance, my profile of CIT Group’s Matt Galligan, formerly of Bank of Ireland. After helping to set up Bank of Ireland’s U.S. portfolio, Matt found himself having to wind it—and his position— down when Irish regulators called for the bank to deleverage. Matt and much of his team from Bank of Ireland weathered that storm and started something new—the real estate finance division at CIT Group. The move isn’t without risk. But as Matt told me, everyone has risk—whether they know it or not. For me, optimism abounds in the story of M&T Bank, as well. With its focus on community lending and a loyalty for its long-time customers, the bank weathered the financial crisis and recently acquired Wilmington Trust, which will allow it to provide new wealth management services to those customers. As someone helping to start something new myself, I took a lot from all of these stories. And I’m sure that you’ll find them valuable and informative, too. Also of value, I hope, will be our analysis of commercial mortgage deals in the New York tristate area. We’ve populated this magazine with lists, charts and graphs—all designed to give you an ongoing, easy to access snapshot of who the lenders, borrowers and brokers are. As we continue on, please feel free to get in touch and let me know what’s working for you and what’s not. And, of course, as we continue on into spring and deals bloom for you, reach out and share them with us. Happy spring.



The Connecticut Portfolio
$163,800,000 | 1,170 residential units

Hoyt Bedford Apartments Stamford, CT

Montoya Apartments Branford, CT

Morgan Manor Apartments Stamford, CT

Seramonte Apartments Hamden, CT

Drew Anderman Financing provided by: danderman@walkerdunlop.com Alan Blank ablank@walkerdunlop.com Commercial Real Estate Finance

Atlanta | Bethesda | Chicago | Dallas | Irvine Nashville | New Orleans | New York | Walnut Creek


Note sales, investments, mortgage originations, mergers, aquisitions

MetLife’s Commercial Mortgage Volume Hit $11 Billion in 2011
Life insurance companies continue to exceed expectations in the commercial mortgage originations space. Insurer MetLife said recently that its Real Estate Investments department originated over $11 billion in commercial mortgages in 2011, compared to more than $8 billion that the company originated in 2010. And according to a MetLife spokesperson, those 2010 numbers were twice those seen in 2009. In Manhattan last year, the company’s volume was bolstered by several high profile originations, including $350 million for 1540 Broadway and a $374 million loan issued for Boston Properties’ 601 Lexington Avenue, where Prudential Mortgage Capital Co. and New York Life’s contributions brought the loan total to $735 million. Robert Merck, senior managing director and head of real estate investments at MetLife, sees the insurer’s strengths as being tied to its reputation, size, financial strength and the speed at which it can execute transactions. “MetLife has built its commercial real estate lending business on key guiding principles, which enabled us to strategically navigate through the economic downturn during the past few years and remain an active lender in the market,” Mr. Merck said in a prepared statement about the loan origination volumes. “Our commitment to prudent risk management and our long-term investment approach has allowed us to take advantage of attractive opportunities in the U.S. and internationally, and we will continue to focus on top quality properties in major markets in 2012.” The company, which had a total commercial mortgage portfolio of $40 billion as of the end of 2011, was “able to originate top quality loans at yields that provided a pick-up of more than 100 basis points over comparable risk corporate bonds,” according to Mark Wilsmann, managing director and head of MetLife’s mortgage lending group. MetLife’s increase in originations volume is in line with the industry as a whole, based upon data from the American Council of Life Insurers. The group reports total commitment volume of $45.42 billion for 2011, a 48.23 percent increase from the previous year. For the remainder of 2012, the company says it will focus on expanding its commercial mortgage activity across the globe, but particularly in the United Kingdom, where it views market conditions as particularly favorable. It targets office, multifamily, industrial and retail properties in top markets.

1540 Broadway.

$33 Million Williamsburg Trade Shows Hotel Craze Filtering to Boroughs
The trade of a boutique hotel in Brooklyn is the latest indication that the New York City hotel market contin-

Hotel Williamsburg.

ues to be on fire. And the co-developers on the project weren’t even looking for a buyer. Hotel Williamsburg, a 64-key, full-service hotel that opened its doors just last November, was bought by King & Grove on March 8 for over $33 million. Renamed King & Grove Williamsburg, the hotel, at 160 North 12th Street in Williamsburg, has followers of the city’s hotel sector abuzz. Daniel Lesser, president and CEO of LW Hospitality Advisors, told The Mortgage Observer that the deal speaks to the city’s overall health. “It’s a brand new hotel in a really dynamic market—Williamsburg is very much a happening place,” Mr. Lesser said. “It’s very emblematic of the fundamental health of New York and how all parts of the city have been, and continue to be, gentrified.” Mr. Lesser also pointed to areas like Long Island City,

where ten to twenty years ago, “there wasn’t a whole lot happening.” The hotel was co-developed by Minneapolis-based Graves Hospitality Corp. and Williamsburg-based KSK Construction Group—developer of the GEM Hotel Union Square. According to a statement from Graves Hospitality, the developers hadn’t anticipated selling. Rather, they planned to “indefinitely operate the property,” until “the market’s overwhelmingly enthusiastic response to the high-profile project attracted a non-solicited purchase offer that was simply too good to refuse.” Benjamin Graves, president of Graves Hospitality, said that the sale highlights the company’s “skills at understanding the intricacies of specific locations and submarkets, identifying the right concept and developing relevant, high-quality projects to drive demand and profitability.” Mr. Lesser, at LW Hospitality, referenced a “New York metropolitan renaissance,” the benefits of which are making their way to the outer boroughs. “That’s what we’re seeing in Brooklyn and that’s why we’re { Continued on Page 6 }



Commercial Property | Mortgage Notes in Default | Mezzanine Debt | Multi Family | Shovel Ready Development Distressed Debt | Stalled Construction Sites | Long Term Leasehold Interest | Commercial Property Hotel Opportunities | JV Structures | Debt Instruments | Real Property in Bankruptcy | Mezzanine Debt Commercial Property | Mortgage Notes in Default | Multi Family | Hotel Opportunities | Real Property in Bankruptcy Shovel Ready Development | Distressed Debt | Stalled Construction Sites | Long Term Leasehold Interest | Retail Condos | Debt Instruments | Commercial Property | Mortgage Notes in Default | Real Property in Bankruptcy



Eli Braha Managing Member of the G.P. ebraha@BerkleyAcq.com | +1 212 867 1234
140W57 NYC 10019

Berkley Asset Management LLC is the General Partner of BERKLEY ASSET FUND I, L.P.
This is not an offer to sell or a solicitation of an offer to buy interests in the fund. Any offer or silicitation will be made only pursuant to the Fund’s Private Placement Memorandum and subscription documents. The above terms may change. The principals make no guarantee of any results. An investment in the Fund is speculative and may result in a partial or total loss of any investment.


seeing hotels like this get built in the first place, and then secondly they end up trading at some very healthy numbers,” Mr. Lesser added. “These are evolving markets on the upswing.”

$325 Million Refi for 100 West 33rd Street
Vornado Realty Trust has refinanced its 100 West 33rd Street building—home of Manhattan Mall—for $325 million. The REIT realized $87 million of net proceeds in the process. The new loan, at an interest rate of LIBOR plus 2.5 percent, matures in March of 2015 and has two oneyear extension options built in. Net proceeds were realized upon paying off the existing loan and closing costs for the current refinancing. The 12-story building sits on the entire eastern block of Sixth Avenue between 32nd and 33rd Streets. It is 1.1 million square feet and includes the mall, at 243,000 square feet, and 847,000 square feet of office space. Retail tenants at the Penn Plaza district building include JC Penney, Victoria’s Secret and Gamestop. Office tenants include Draftfcb and Polo Ralph Lauren.

CBRE: Investments in European CRE Flowing from North America
multiple dimensions about ways marThe European commercial real eskets operate.” tate market is being dominated by U.S. Blackstone Real Estate Debt Strateand Canadian investors, with several gies, a division started in 2008, curNew York-based asset managers purrently has $4 billion of assets under suing routes into real estate—like debt management, according to the compaportfolios—that others pass by. ny, whose total real estate assets under According to data from CBRE, management as of December 31, 2011, North American investors were were $42.9 billion. responsible for 30 percent of investThe increase in non-European buyments in European commercial real ers of European commercial real estate estate last year. This was up from 21 caused a 7 percent increase in overall percent in 2010. Of this capital in 2011, investment activity in the market. It Euro 9 billion was from the U.S. and rose from Euro 110 billion in 2010 to Euro 2 billion was from Canada. Euro 118 billion in 2011. Michael Haddock, a London-based After the UK, the next most popular senior director, EMEA Research and Michael Haddock. market for North American investors Consulting, at CBRE said that inveswas Germany, Mr. Haddock said. “That has certainly tors tiptoe around the countries hardest hit by the been the case for the last couple of years,” he added. European debt crisis. He said that the general trend is “Next largest—pretty much equally for last year—were investors looking for core real estate in core markets France and Russia. And then it trails off pretty quickly and avoiding the risk associated with distressed assets. after that.” To that point, the CBRE data showed only “But there is a small group of investors,” he pointed about Euro 350 million in Italy, Euro 170 million in out, “who do actively seek out risk in the hope of getSpain and nothing Mr. Haddock could see in Portugal, ting very good returns.” Part of this is due to a different Ireland or Greece—among the weakest of the Euro mindset, Mr. Haddock pointed out. zone markets. “With somebody like Blackstone, it’s quite interestThough the investment activity was spread across ing that they’re pursuing quite a number of different markets in countries least impacted by economic turroutes into real estate—so Blackstone [Group] has been moil, the London office market fared the best. Central quite prominent as buyers of debt portfolios, as well as London took 18 percent of total North American capital direct real estate,” he said. “That’s reasonably typical invested in Europe in 2011. of U.S. investors. That they have the ability to think in

Deutsche Bank Berkshire Mortgage Acquired
Real estate financial services company Ranieri Real Estate Partners and private equity funds affiliated with New York’s WL Ross & Co. have completed their acquisition of Deutsche Bank Berkshire Mortgage. Jeffrey Day, DBBM’s CEO, will continue in that role at the company, which has been dubbed Berkeley Point Capital. It originates multifamily loans for Fannie Mae, Freddie Mac and the Federal Housing Administration. Berkeley Point services a $29 billion portfolio of multifamily loans and, according to a release, is the second largest originator of Fannie Mae loans. Jon Vaccaro, founder of Ranieri Real Estate Partners and head of real estate at Ranieri Partners, lauded the value of the acquisition. “A high-quality acquisition of this scale within the multi-family sector is unique and rare,” Mr. Vaccaro said in a prepared statement about the deal. “The new Berkeley Point provides us with an excellent in-place team, that we know well and is capable of much more. With the benefit of the strong WL Ross and Ranieri partnership, we believe Berkeley Point is poised for growth.” Mr. Vaccaro was previously global head of commercial real estate at Deutsche Bank, a position he held from 1997 to 2010. DBBM was a subsidiary of Deutsche Bank. According to James B. Lockhart III, vice chairman of WL Ross and former director of the Federal Housing Finance Agency, “Berkeley Point did over $3 billion in

multifamily originations last year.” He added that WL Ross looked forward to working with Mr. Day and his team “to help them grow in this critical part of our nation’s housing market.”

Enterprise, Bellwether form JV and Eye $1.5 Billion in Mortgages
Enterprise Community Investment’s mortgage finance business is merging with Bellwether Real Estate Capital, The Mortgage Observer has learned. The new company, Bellwether Enterprise Real Estate Capital, is aiming for $1.5 billion in mortgage production volume this year, some of that based here in the tristate region. The merger is expected to be completed by the end of May or June, Lamar Seats, senior vice president of

Enterprise’s Multifamily Mortgage Finance business, told The Mortgage Observer. Mr. Seats will head up the newly formed entity as its CEO. Bellwether Real Estate Capital’s Ned Huffman will serve as its president. Mr. Seats said that the two companies have very little overlap and will bring different strengths to the table. “They bring a very strong commercial lending platform through over 25 life companies to the new organization, and that’s everything from office, retail, hospitality and industrial, and they also bring a very robust multifamily platform,” he said of Bellwether. “As for Enterprise, we are solely multifamily focused and our core focus is really low income and affordable housing, which we execute through Lamar Seats.



We’re Flushing Bank, your lending and banking specialist.

Multi-Family and Mixed-Use Mortgages1
• Apartment Buildings • Underlying Co-ops • Competitive Rates

Business Checking Plus Interest


% .25

Cash Management Services
• Remote Deposit • Cash Manager Direct • Lockbox Services


On balances of $15,000 or more

At Flushing Bank, we’re small enough to know you and large enough to provide you with the competitive lending and banking solutions you need. For more information visit your local Flushing Bank branch, call 800.581.2889 or go to www.FlushingBank.com.
1 All mortgages, loans and lines of credit are subject to approval. Certain fees and restrictions may apply. Flushing Bank is a portfolio lender with wide range of loan programs offering various rates and terms. All loan rates and offers are subject to change and termination without any prior notice. 2 New accounts with new money only. A new business checking account is defined as any new business checking account that does not have any authorized signatures in common with any other existing Flushing Bank business checking account(s). An existing checking customer is defined as anyone who currently has or has had a Flushing Bank checking account within the last 24 months. New money is defined as money not currently on deposit with Flushing Bank. The annual percentage yield (APY) for the Business Checking Plus Interest is 1.25% for daily account balances of $15,000 and greater. This rate will remain in effect for 90 days after account opening. At the end of this 90-day Guarantee Rate Period the rate will revert to the standard tier pricing for the account. Please refer to the Flushing Bank Business Fee Schedule for more details. The APY is effective January 3, 2012. You must maintain a daily balance of $15,000 or greater for the statement cycle to receive the disclosed yield. You must deposit a minimum of $100 to open this account. No minimum balance is required to avoid a monthly maintenance fee. The rate and offer are subject to change and early termination without prior notice at any time. Other fees and restrictions may apply. Speak with a Flushing Bank Business Banker for more details and information. Flushing Bank is a trade name of Flushing Savings Bank, FSB.


Fannie Mae, Freddie Mac and FHA. So we’ll be merging two companies—one with a focus on multifamily rental housing and the low income to moderate income side with Bellwether, which has a very strong commercial and then market-rate multifamily business.” Bellwether Enterprise will be based in Cleveland, Ohio, but will retain a presence in the New York tristate area, where Mr. Seats said that it will target low income and affordable housing. “We cover the entire New York City metro area and all five boroughs, so we want to do business in all of them,” he explained. As for its deal pipeline—there are targeted loans moving through, he said, both in New York City and New Jersey. Overall, Mr. Seats said, the company expects to hit $1.5 billion in mortgage production from the time the merger takes effect, through the end of 2012, a figure he conceded was both aggressive and “very solid volume.” In a prepared statement about the merger, Charles Werhane, president and CEO of Enterprise Community Investment, said that $1.5 billion was, in fact, only a start. “Through this merger and with planned strategic growth initiatives,” Mr. Werhane said, “we expect to build Bellwether Enterprise’s annual production volume to over $3 billion.”

Helios Capital Retained to Advise on Two Loan Sales Totaling $9.3 Million
Helios Capital Advisors has been retained to provide advisory services on the sale of two non-performing first mortgages. The loans are secured by a development sites in Hell’s Kitchen and Harlem. The firm, which opened its New York City office in January, will use a controlled bid process for the two loans. The first mortgage on the Hell’s Kitchen development site—80,000 square feet—has an unpaid principal balance of roughly $7.5 million. Meanwhile, the first mortgage on the Harlem property has an unpaid principal balance of $1.8 million. That site is located on Frederick Douglas Boulevard. “Helios will use our established, controlled bid process to complete both of these sales,” Steven Schultz, chief executive officer for Helios Capital Advisors, said in a prepared statement about the assignment. “These diverse properties provide tremendous potential and we are sure they will attract much interest from knowledgeable investors.”

Based in Woodbridge, NJ, Helios opened a Madison Avenue location in response to over $300 million in transactions in 2011, the firm said at the time. Managing director Josh Malka and associate director Ben Shulman both work out of that office. Mr. Malka said that, since opening, “Helios has sourced many exclusive assignments in the borough of Manhattan and the outer boroughs from noted banks such as Northfield, BNB as well as two private lenders.”

Madison Realty Capital Gets $28.7 Million Portfolio
Real estate investment firm Madison Realty Capital has grabbed a portfolio of New York City loans from a regional savings bank. The portfolio, secured by 11 Manhattan properties and 14 Brooklyn properties, is valued at $28.7 million and consists of 15 notes. The loans in the portfolio were originated between 2006 and 2009. Joshua Zegen, co-founder and managing principal of MRC, told The Mortgage Observer that the Manhattan properties were located in Hamilton Heights and west Harlem. “A number of the properties we got deeds and


With a long history of handling the most complex commercial real estate transactions, a deep knowledge of the unique realities of the New York market, and a wealth of relationships forged in real estate and government, the lawyers of Cozen O’Connor are prepared to help you with your transactional, development and litigation needs.

Abby M. Wenzel New York Office Managing Partner 212.883.4997 | awenzel@cozen.com | 277 Park Avenue | New York, NY 10172 For more information, visit us online at www.cozen.com. 575 Lawyers | 21 Offices | © 2012 Cozen O’Connor




debt—we bought the debt but it came along with the deeds to the property as well at closing,” he said in reference to the upper Manhattan portion of the portfolio. These number 125 apartment units and will be managed by Silverstone Property Group, the property and asset management arm of MCR. He said that they were working at the moment to maximize value on those properties. The 14 Brooklyn properties are in Park Slope, Carroll Gardens and Bed-Stuy. In many cases, MRC restructures the deal back to the borrower, but Mr. Zegen said that his firm was uniquely positioned should this not be the case. In cases where it takes ownership, Silverstone is ready to take over management and reposition the buildings. “In many of these deals we won’t own,” he said, “and obviously we’re very happy to be paid off.” Since 2010 MRC has closed over $150 million in distressed debt transactions with more than 10 banks. Mr. Zegen said that he sees more distress on the horizon as well. “In the recent 12 months a lot of the deals have this kind of a restructuring or recapitalization component,” he said. “I see that happening more and more because some of the smaller banks—finally their balance sheets

have strengthened—and so they have the ability to write down assets and sell loans at some sort of a discount.”

Mixed Bag of Notes on Offer from Ariel
Ariel Property Advisors is marketing a note portfolio that is made up nine investment properties throughout the New York City area. Its principal balance is a little under $9 million, according to Ariel. Most notably, however, the portfolio includes properties that are both performing and non-performing, a fact that Ariel Property Advisors vice president Victor Sozio says makes them unique. “Some note sale packages are just purely distressed, where they include notes that are in the midst of the legal process,” Mr. Sozio told The Mortgage Observer. “Here we have a mix of both performing and nonperforming notes. Five out of the nine are performing— and these notes offer up good returns.” Those returns are being achieved, he added, as a result of the fact that most are at an interest rate above 6 percent, collateralized by strong assets. Those assets include three properties in Manhat-

tan, two in Brooklyn, three in the Bronx and one on the South Shore of Long Island. Mr. Sozio declined to provide specific addresses or the name of the financial institution on whose behalf Ariel is marketing the portfolio. Once signed confidentiality agreements are in place, however, he said that interested parties will have access to the data room, “where they will be able to go through all the mortgage files, see where they stand in the legal process, if there is one, and they’ll see all the internal appraisals the institution has performed.” “It’s a good mix,” Mr. Sozio said of where the performing portion of the portfolio is located. “Both that we have in Manhattan are performing. Of the two in Brooklyn—one is performing and one is in the legal process—and in the Bronx one out of the three is performing.” Despite the tremendous amount of commercial real estate loans coming due this year, Mr. Sozio doesn’t anticipate a huge wave of distress hitting the market this year. He said that “banks have done well in strategically unloading these distressed notes,” which has kept a Victor Sozio.

For Sale
117-119 West 21st Street
Rare Vacant Chelsea Redevelopment Opportunity
– Vacant 4-Story Warehouse – 44 Feet of Frontage with Double Curb Cut – Exceptional Opportunity to Develop Luxury Residential, Hotel or Commercial with Retail Component – Adjacent to the Newly-Built “Indigo Condominium” and Across the Street From Record-Setting 2011 Purchase Price, “21 Chelsea”, a 210-Unit Apartment Building – ±33,000 Buildable Square Feet – Near Flatiron District, Union Square and Greenwich Village


Contact Exclusive Agents: David Schechtman, Esq. Alan P. Miller 646-658-7352 646-658-7328 dschechtman@easternconsolidated.com amiller@easternconsolidated.com

Real estate investment services




large wave of them from coming along at once, a fact he said has kept values up. Ariel Property Advisors is marketing two other notes from a different financial institution for Brooklyn properties—one on Van Brunt Street in Red Hook and one on Sutter Avenue in East New York.


Heyman Properties and Equity One didn’t return phone calls in time for publication.

Staten Island Shopping Center Gets $18M Loan
A joint venture between Kimco Realty Corp. and a group of institutional investors has secured an $18 million non-recourse first mortgage loan for Staten Island’s Forest Avenue Shopping Center. Kimco Income Operating Partnership, the joint venture, owns 59 community shopping centers in 18 states around the U.S. This particular shopping center is 190,000 square feet and includes TJ Maxx, Michael’s and CVS among its long-term tenants. “This is a relatively low-leverage financing, but the loan has flexible pre-payment terms that were very attractive to Kimco and its partners,” Mark Ehlinger, a Cushman & Wakefield Sonnenblick Goldman managing director, said in a prepared statement about the deal. C&WSG was the borrower’s exclusive advisor and arranged the loan. The lender was not disclosed, but was described as “the U.S. banking subsidiary of an international financial company.”

USAA Real Estate Buys Interest in Square Mile
USAA Real Estate Co., based in San Antonio, Texas has bought an interest in New York–based investment firm Square Mile Capital. According to a statement, founders Jeffrey Citrin and Craig Solomon will continue to oversee dayto-day operations, retaining a majority interest. A spokesperson for USAA declined to specify the amount of the investment, though sources told The Mortgage Observer that it amounts to a 49.9 percent piece of the firm. Pat Duncan, chairman and CEO of USAA Real Estate Co., said in a prepared statement that the investment was meant to “broaden the investment opportunities we can offer our clients.” He added that “Mr. Citrin and Mr. Solomon offer extensive investment expertise in the North American real estate and financial markets, and we look forward to working with them to expand the platform they have built.” Square Mile was launched in 2006 and has since deployed almost $2 billion of equity. Mr. Citrin, managing principal, said that the firm had made great strides and that the alliance would be complementary. “Our platform’s alliance with USAA Real Estate Company will help us to open new doors and provide us with even more firepower in the marketplace, while enabling Square Mile to remain nimble and decisive in our decision-making,” Mr. Citrin said. “Both organizations have strong real estate platforms that now can complement each other, and we look forward to jointly taking full advantage of investment opportunities that will emerge in the coming years, on behalf of our investors.” Square Mile has three discretionary real estate funds. The $2 billion of equity it has deployed is across over 80 investments. Last year, it invested, along with equity partner Mountain Development Corp., $18.1 million in an empty suburban office building in northern New Jersey—in Roseland. It also teamed with Invesco Advisors, WL Ross & Co. and the Canyon-Johnson Urban Funds in 2011 to acquire a $880 million portfolio of real estate loans from Bank of America.

$1.7 Billion in Mortgage Capital Hit NYC in Feb.
According to data from Off-Market RADAR, February saw $1.7 billion in commercial real estate mortgage capital flow into New York City, as investors continue to target the city’s plum asset types. The month’s largest loan came in the form of $254 million in financing from Citibank, which was used to fund the buyout of the tenant-in-common interests in a condo conversion at 870 Seventh Avenue, home of the Park Central Hotel. LaSalle Hotel Properties bought the hotel last year for $405.5 million. Next on the list of top financings was a $160 million loan secured by the leasehold interest on 992 and 1000 Madison Avenue. Alexico Management Group took that loan out from German American Capital Corp. All in all, the data shows, multifamily in the five boroughs took the lion’s share—over half, at $800 million. Hotels were second, at $360 million, and office received less than half of that, at $150 million. Brian McCarthy, vice president and co-founder of Off-Market RADAR, said in a prepared statement about the findings that the firm expects debt capital in the New York marketplace to increase as the economy improves. “Judging by the $1.7 billion in debt capital in the market in February alone, there will be many mortgages and deeds for banks, lenders and owners to work through,” Mr. McCarthy said. “Based on the data we have collected since the beginning of 2012, there are ample opportunities for investors and lenders to acquire all types of commercial real estate assets throughout New York City.” One surprise in the findings was the popularity of land sites, which Mr. McCarthy said are gaining favor among both local and out-of-state developers. “This trend indicates that speculative development may be on its way back to the strongest submarkets of Manhattan, meaning a full-blown economic expansion isn’t too far

Shopping Centers Head to Equity One Portfolio
According to sources, Heyman Properties is in the process of selling three Connecticut shopping centers to Miami’s Equity One for a total of $79 million. They include the Darinor Plaza, at 500 Connecticut Avenue in Norwalk; Compo Acres, at 374 Post Road East in Westport; and Post Road Plaza, at 430 Boston Post Road in Darien. Darinor Plaza consists of 145,637 square feet of leasable space and is 100 percent occupied by tenants such as Kohl’s, Old Navy and Payless Shoes. It’s currently under contract for $56 million, sources say. Compo Acres is 43,107 square feet and leased to tenants like Trader Joe’s and Jos. A. Bank. There is 4,024 square feet of vacant space there. Post Road Plaza, home of Trader Joe’s, Orvis and other stores, has 20,005 square feet and is 100 percent occupied, according to the Equity One Web site.



your property into a the Con Edison


building at

May 1- Hilton New York
Con Edison’s Green Team is using innovative new technology to help transform commercial and industrial properties into high-performance buildings. We’ve already given out over $7 million in incentives to help more than 2,000 businesses go green and save. Find out how you can reduce operating costs, increase your property’s value and realize a return on your investment at the Con Edison Commercial & Industrial Energy Efficiency Summit 2012. � Latest technologies � Sustainable building practices � Major rebates and financial incentives � Leading experts

All in one place. Lunch and cocktail/networking reception included.

Register today at conEdsummit.com

For more information: call 1-877-797-6347 e-mail conedci@lmbps.com

Hirings, promotions, defections, firings

work force

Madison Capital has hired Jonathan Ratner as a director of asset management. He was previously a VP at Emmes Asset Management. Mr. Ratner works on capitalization, financing, leasing, capital programming and strategic planning at the firm, which invests in retail and mixed-use properties Jonathan Ratner. in New York and other urban markets. At Emmes, Mr. Ratner managed the firm’s $500 million New York City portfolio, which included 40 assets and two million square feet. Other responsibilities at Emmes included the development and execution of value-enhancing strategies for the firm’s retail, office, multifamily and industrial assets. He also previously worked as a project manager for Richter+Ratner Contracting Corp.

counsel is a natural extension of the work Tom is already performing for us and an important addition to GTIS as we continue our growth.” Before joining GTIS Partners, Mr. Feldstein was an attorney in private practice representing a number of clients, including GTIS, providing Tom Feldstein. them with transactional legal services. For several years, from 2002 to 2009, he was a managing director at Tishman Speyer, where he was responsible for overseeing legal activities in the Midwest and western U.S. He then served as CEO of Tishman Speyer Office Fund, which is listed on the Australian Stock Exchange.

Asia-Pacific, Peter Eastham, to its U.S. Commercial Mortgage-Backed Securities team as head of CMBS Ratings. Mr. Eastham joined the team at S&P in 2000. His work spans all structured finance asset classes with a specialization in commercial real estate and assetbacked securitizations in Asia and Australia. Prior to S&P, Mr. Eastham worked in the treasury department in the Australian government. He holds a bachelor’s in commerce and a graduate diploma in finance and investment from Australian institutes.

Natixis, the global asset manager, has hired Chris Reilly in it’s New York office, where he’ll serve as a managing director on the real estate finance team. His past employers include Fitch Ratings and Morgan Stanley, though for the past five years he had been overseeing the large-loan operation at UBS. Last year, Mr. Reilly also served as interim group head in the commercial mortgage backed securities group at the bank.

Terry Baydala, a former senior vice president at Anglo Irish Bank, has joined Meridian Capital Group as an executive vice president. He heads the structured finance division at Meridian. At Anglo Irish Bank, where he worked for nearly five years, Mr. Baydala helped to lead the team that originated and syndicated U.S. commercial property loans. Once Anglo Irish Bank sold off its portfolio of U.S. commercial property loans, Mr. Baydala was one of several employees whose positions were phased out.

John Monaghan, formerly a director in the Bank of Ireland’s U.S. Property Finance division, has moved to CIT Group as a director at CIT Real Estate Finance. He rejoins a group of former Bank of Ireland employees who moved to CIT when the bank spun off its U.S. real estate holdings. Mr. Monaghan had previously worked as a manager in the Property and Tax Unit at Specialist Business Banking in Dublin and also as a business manager at College John Monaghan. Green Branch, also in Dublin, where he helped to manage a portfolio of over 200 small to medium-sized businesses.

KBS Realty Advisors, the private equity real estate company and Securities Exchange Commission-registered investment advisor, has appointed Randi Kaufman as senior vice president and asset manager in the California-based firm’s New York offices. Ms. Kaufman, who previously served four years at Blackrock, where she was a vice president and asset manager, will oversee Randi Kaufman. all asset management functions associated with KBS properties in New York, New Jersey, Massachusetts, Ohio and Pennsylvania. “Randi has an impressive track record with an eye towards reaching property performance goals,” said Chuck Lindwall, KBS regional president, in a prepared statement. “Her wealth of experience—both from an asset management and geographic standpoint—will bode well for KBS in adding value to its portfolio.” Send news and tips to Carl Gaines at cgaines@observer.com

Fitch Ratings has rearranged Adam Fox within the organization. Mr. Fox—who joined Fitch in 2003 from Rockville, Md.–based REIT Criimi Mae—had been working as a CMBS surveillance analyst. Now, however, he’s heading a three-person team on the rating agency’s Operational Risk Group. The group is charged with CMBS primary, master and special servicer ratings. No word yet on who will replace him in the position he vacated at Fitch Ratings. Standard & Poor’s recently moved its managing director and lead analytical manager for Adam Fox. Structured Finance Ratings in

GTIS Partners has hired Thomas Feldstein as general counsel and managing director. He’ll be based in New York, at the company’s headquarters, and will report to Tom Shapiro, the company’s president. “I’ve known Tom personally for almost 25 years,” said Mr. Shapiro. “Having him fill the role of general



*********The State of the New York Real Estate Market
' ' ' ' ' ' Wednesday May 9, 2012

' '
• • ' • • • •





@A;B*+C*/#*EA;B*+CA* EA;B*+C*/#*JA;B*+C* JAPB*+C*/#*DBAPB*+C* DBAPB*+C*/#*DDABB*+C* DDABB*+C*/#*DXABB*8##'* DXABB*!C*/#*DAD=*!C*

* * * * * *

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
!".7&/2*LY,./)?*3#002"Z.&R*T2'-2"$?*U'$,"&'Z2* 3#0S&')*H*U'72$/02'/*W&'(2"$[9%2"2*-#*92* 9&'/*/#*S"#7.-2*4,'-.'G* • F,$$2RR*+SS2R?*!"2$.-2'/?*5%2* !"&2-.,0*1"#,S* V#%'*3#''2RR)?*CG"*Q."2Z/#"?*6W]* F2&R/)*U'72$/#"$* F.Z%&"-*C&Z(?*8#"/%*+02".Z&'*3LM?* +FL+*!"#S2"/)*!&"/'2"$* 1.'#*C&"/#ZZ.?*!"2$.-2'/?*8:3*H* T#'G*U$R&'-?*C*H*5*W&'(* +'/%#')*M"$#?*L_2Z*CG"*Q."2Z/#"?* 3&'/#"*3#002"Z.&R*F2&R*L$/&/2* +-&0*]Z%9&"/`?*a2&-?*6'./2-*]/&/2$* H*L,"#S2*F2&R*L$/&/2*1"#,S?*+'G2R#?* 1#"-#'* V&Z(*5&)R#"?*CG"*Q."2Z/#"?*a2&-*#4* 1R#I&R*F2&R*L$/&/2*>.'&'Z2*1"#,S?* !",-2'/.&R*F2&R*L$/&/2*U'72$/#"$* 1"2G#")*\&R`?*CG"*Q."2Z/#"?* C#"/G&G2*!"#-,Z/.#'?*8#"/%92$/2"'* U'72$/02'/*C&'&G202'/*3#0S&')?* TT3* V#$%*b2G2'?*C&'&G.'G*Q."2Z/#"*H*3#[ >#,'-2"?*C&-.$#'*F2&R/)*3&S./&R*


K2)'#/2*!&'2RA**3LM*H*3MM[O.29*#'*/%2* 0&"(2/* * • +R4"2-*W"##($?*!"2$.-2'/?*3%&$2* 3#002"Z.&R*52"0*T2'-.'G* • V#$2S%*>.Z&R#"&?*!"2$.-2'/*H* ()*'+'(**,-'' 3LM?829*:#"(*3#00,'./)*W&'(* • • .#-/01'234%5#"%6'!"/-37/89'+'()*6' W".&'*a&"".$?*3LM?*T&--2"*3&S./&R* • :/;'<#"='(#&&>839?'@%8=' C.Z%&2R*!&SS&G&RR#?*LO!*H*3MM* K.0Z#*F2&R/)* • A341%/5'!%00%$%55#6')B!'+'(**6' • C3&4#'D/%59?' 82.R*]%&%?*!"2$.-2'/*H*3MM?*a2"$%&* a#$S./&R./)*5",$/* • :/35'E1%16'!"/-37/89'+'(**6' • T&"")*].R72"$/2.'?*!"2$.-2'/*H*3LM?* F/"-1%'F#-039%539?'G">-9' ].R72"$/2.'*!"#S2"/.2$* L0&',2R*]/2"'?*!"2$.-2'/*H*3MM?** • • H%""?'E35I/"-9/386'!"/-37/89'+'()*6' a&"/`*C#,'/&.'*U'-,$/".2$* E35I/"-9/38'!"#0/"93/-'

5%2*]/&/2*#4*/%2*"2$.-2'/.&R* 0&"(2/*4#"*"2'/&R*H* Z#'-#0.'.,0*.'*/%2*"2G.#'* • M42"*:&"-2'.?*C&'&G.'G* C20I2"*H*3#[>#,'-2"?* ]/#'2%2'G2*!&"/'2"$* V&02$*3&"S2'/2"?*]F^* LO!*H*3%.24*T2'-.'G* M44.Z2"?*829*:#"(* 3#00,'./)*W&'(* 3&"R*1#R-I2"G?*!&"/'2"?* F#$2R&'-*!"#S2"/)* 3#0S&')* V#$2S%*CZC.RR&'?*V"^?*3LM?* QQ1*!&"/'2"$* +0)*F#$2?*3#[S"2$.-2'/?* F#$2*+$$#Z.&/2$* Q&7.-*O#'*]S"2Z(2R$2'?* !"2$.-2'/?*5#RR*W"#/%2"$* 3./)*T.7.'G*

' • ' • ' '
• • •

' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' F2G.$/"&/.#'A* 3#$/*#4*272'/A* dX=B** Q&)*#4*L72'/A* d;BB**3%2Z($*#'R)*/#A*829*:#"(*F2&R*L$/&/2*5O?*TT3* TV/W'O77"/--U' ' C.Z%&2R*]/#R2"?*829*:#"(*F2&R*L$/&/2*5O?*TT3?*X=*],//#'*!R&Z2*]#,/%?*],./2*@C?*829*:#"(?*8:*DBBXX* ' C.Z%&2R*]/#R2"?*C#-2"&/#"*H*3##"-.'&/#"*** (S:<'GB' ' ' **>#"*&--./.#'&R*.'4#"0&/.#'*Z#'/&Z/A*C.Z%&2R*]/#R2"**e#f*<P<[PPX[B@D@**0$/#R2"g0&-.$#'"2&R/)Z&S./&R^Z#0* TE9"//9'O77"/--U' T<#>"'!1#8/U' ' T(39?U6'TE9%9/U'T!#-9%5'(#7/U' 999^'29)#"("2&R2$/&/2$,00./^Z#0* ' ' ' '

Q272R#S02'/$*.'*/%2*"2G.#'A*829*:#"(*3./)?* *JJ34/"6'H%77/"'(%039%5' T#'G*U$R&'-*H*829*V2"$2)* * • )&%8>/5'E9/"86'!"/-37/89'+'(**6' • F%"9L'A#>89%38'M87>-9"3/-' C.Z%&2R*W2"4.2R-?*]O!?*LY,./)*M'2* • F#I2"/*V^*3#,G%R&'?*!".'Z.S&R?** ' 5FU5L3*F2&R*L$/&/2*3#0S&')* * • N/I/5#0&/89-'38'91/'D/$3#8' F#)*3%.'?*F2G.#'&R*Q."2Z/#"?** ''''':/;'<#"='(39?6'H#8$'M-5%87'+':/;'./"-/?' 3#0*F2&R*L$/&/2?*5Q*W&'(* • O55/8'P#57&%86'!"/-37/896'E.!' K^*5%#0&$*LRG%&'&)&'?*3%&."0&'*H* • 3#[>#,'-2"?*5>*3#"'2"$/#'2* D/-37/893%5' • +RR2'*1#R-0&'?*!"2$.-2'/?*]V!* • CQ'G1#&%-')5$1%8%?%86'(1%3"&%8' F2$.-2'/.&R* • +'(#R2#>87/"6'G2'(#"8/"-9#8/' V244"2)*T27.'2?*3%&."0&'*H*3LM?* Q#,GR&$/#'*Q272R#S02'/cT27.'2* • ./JJ"/?'H/I38/6'(1%3"&%8'+'()*6' W,.R-2"$*


• • •



5 deals under $30M

211 E. 43rd St. $27 Million
Mayrose Holdings LLC obtained a $27 million mortgage for an office building at 211 East 43rd Street in midtown Manhattan. The building is home to the Bolivian Consulate in New York and the offices of City Councilmember Daniel Garodnick and State Senator Liz Krueger. The property, which features office and retail space, is located two blocks from Grand Central Terminal and has 177,000 square feet and over 24 stories. The mortgage price per square foot is $136. The building has office rentals available ranging in size from 600 to 3,000 square feet, according to office listing Web sites. Mayrose Holdings LLC is the owner/borrower, while Eastgate Realty manages the building. Mayrose Holdings’ mortgage on the building was provided by HSBC.—Matt Draper

537 W. 27th St. $26.3 Million
A $26.3 million mortgage for a property at 537 West 27th Street in Manhattan was finalized by W. 27th Street Rental LLC recently. Germany-based Landesbank is the lender. Landesbank’s U.S. headquarters is located at 280 Park Avenue in midtown Manhattan. W. 27th Street Rental LLC is the borrower on record, but the owner is Westside Congregation of Jehovah’s Witnesses Inc. The mortgage that Landesmark provided had a price per unit of $295,557, and the mortgage price per square foot is $205. The loan-to-value ratio on the deal was 63 percent. The property is a multifamily building featuring 128,000 square feet across 89 units and 13 floors. It includes Chelsea Muse, a contemporary 28-unit apartment building that started leasing units in the middle of last year. Those units range from 485 to nearly 1,300 square feet. The site the property was built on was acquired for development in 2007 for approximately $42 million. Of the 535 total mortgages originated in February 2012, more than 50 percent, or 277, were for multifamily properties, according to data from Actovia.—MD

2100 Round Pointe Drive $22.5 Million
Marcus & Millichap Capital Corp. arranged a $22.5 million loan for the refinancing of Parkside Apartments, at 2100 Round Pointe Drive in Haverstraw. The loan is adjustable for five years and has a loan to value ratio of 65 percent. The apartments refinanced through this deal are part of the larger Harbors at Haverstraw. According to Steven Rock, a senior director in MMCC’s Manhattan office, the apartments are part of “a breathtaking master-planned development on the Hudson River that was completed in the spring of 2011.” He added, in a statement about the financing, that the 110 units at the property are 70 percent leased. The lender was Chase Bank.—CG

72 Madison Ave. $22 Million
The Moinian Group completed a $22 million mortgage deal for a loft building it owns at 72 Madison Avenue. The building features 12 stories of loft offices at a total of 52,965 square feet; the mortgage price per square foot is $415. It is located between 27th and 28th streets near Madison Square Park. Tenants include corporate firms such as Wind-Up Entertainment and spiritual center Suhkyo Mahikari, according to the Moinian Group’s Web site. In 2009, the Moinian Group completed a capital improvement campaign on the building, including upgrading the lobby and modernizing the elevator system. Sharim, which is listed as the borrower, has an office at 530 Fifth Avenue. Minneapolis-based U.S. Bank was the lender. U.S. Bank has an office at 100 Wall Street in Lower Manhattan as well as branches throughout the city. Eleven finance deals were completed within the property’s 10016 ZIP code in February 2012, ranking it in the top five most-active ZIP codes in New York City in terms of financing during that month. The 10016 ZIP code includes the neighborhoods of Kips Bay and Murray Hill.—MD

2121 State Route 27 $11 Million
Morgan Stanley Mortgage Capital Holdings provided a $11 million loan for a research and development facility in Edison, NJ. The financing was via a 10-year, fixed-rate securitized loan. The facility, at 2121 State Route 27, is fully leased by Revlon Consumer Products Corp. and is being used as its worldwide research and development center for all the company’s brands. HFF arranged the financing for an affiliate of Angelo, Gordon & Co., AG Net Lease Fund II. The property is part of the 247,245-squarefoot Edison Towne Center. HFF managing director Evan Pariser and director Michael Klein worked to represent the borrower in the deal. Angelo, Gordon & Co. is an investment advisor dedicated to alternative investing. Currently, it has roughly $22 billion of assets under management.—Carl Gaines

These are compiled and searched using Actovia, city records and published reports.



5 deals over $30M


1515 Broadway $770 Million
In another recent Bank of China transaction, SL Green Realty Corp.’s 1515 Broadway is being refinanced with a $770 million first mortgage. Home to Viacom, whose lease there expires in 2015, the building is 56 stories and over 2 million square feet. The loan was arranged by HFF. SL Green bought the building in 2002 in a joint venture with Canadian pension fund SITQ whose interest there it bought out in 2011. The joint venture paid $483.5 million for the building when it was purchased from Equitable Life. Recent leases include 7,213 square feet taken by entertainment software company Electronic Arts. The Redwood City, Ca.-based company signed a five year lease for part of the 36th floor. —MD

1 W. 39th St. $210 Million
452 Fifth Owners LLC finalized another large Manhattan-based mortgage deal on March 8, 2012, securing $210 million for property at 1 West 39th Street. The property, which features lofts and offices, includes 123,000 square feet over 12 stories. It is located on the corner of 39th street and Fifth Avenue, just south of Bryant Park. The loan-to-value ratio is 64 percent and the mortgage price per square foot is $1,706. Israeli lender Bank Leumi provided the financing for owner, the real estate arm of IDB Group, Property and Building Corp. The international investment arm of IDB, Koor Industries, purchased the building with PBC in April 2010, according to the IDB Group Web site. There were a total of 29 loftoffice mortgages in New York City, or about 5 percent of the total mortgages, originated in February 2012, according to data from Actovia. —CG

200 E. 79th St. $112 Million
Skyline Developers closed on a $112 million construction loan for a condo building on Manhattan’s Upper East Side. The development site is located at 200 East 79th Street. Once completed, the site will be the location of a 19-story, 45-unit Cetra Ruddy-designed condo, a spokesperson for the firm confirmed to The Mortgage Observer. The loan was provided by Wells Fargo. Skyline’s other New York City-based condos include 170 East End Avenue, while its rental properties include 37 Wall Street, Post Towers at 75 West Street and 194 East Second Street.—MD

130 Cedar St. $70 Million
Bank of China provided a $70 million mortgage to borrower Cedar & Washington Associates for its building at 130 Cedar Street in lower Manhattan. The property features 181,297 square feet and is 21 stories tall. The mortgage price per square foot is $386. 130 Cedar Street is located across the street from the World Trade Center site and has gone through renovations and conversions since being damaged in the Sep. 11 attacks. A former office building, it was closed for eight years after the attacks before being converted into twin hotels, with retail space and restaurants. The owner of the property, according to data from Actovia, is Brack Capital Real Estate, whose other New York City investments have included 15 Union Square West, the James Hotel and the Greystone Hotel. Last year, in a joint venture with InterContinental Hotels Group, it also acquired 180 Orchard Street for roughly $46 million.—CG

123 W. 44th St. $57 Million
Metropolitan Times Square Associates LLC, a New York-based lessor of real estate, finalized a $57 million mortgage for a multifamily property at 123 W. 44th Street in Manhattan. The deal is listed as having been originated Feb. 15, 2012. The property, known as AKA Times Square, is located in the heart of the Theater District and includes 115,355 square feet across 122 units on 13 floors. Metropolitan Times Square, which is both the borrower and owner, paid $467,213 per unit and $494 per square foot in the mortgage deal. Residences range from 650 to 1,500 square feet, according to real estate listings. The loan to value ratio of the financing was 70 percent. Canada-based bank CIBC is the lender. CIBC, which has New York offices at 300 Madison Avenue and 425 Lexington Avenue, recently announced 2012 first quarter net income of $835 million, up from $763 million for the same period last year. Multifamily/coop properties accounted for more than half of all mortgage deals in New York City between Feb. 15 and March 15, 2012, according to Actovia data. There were 277 multifamily/coop mortgage deals, about 53 percent of all deals, during the month-long period. —MD



The Secrets Behind M&T’s Lending Might


leet of foot, with a concentration on maintaining its focus on community banking and an ownership mentality, M&T Bank’s performance during the financial crisis might give competitors pause. Now, with May 2011’s acquisition of Wilmington Trust, the bank is branching out, providing high-wealth owners of real estate in New York and elsewhere with wealth management and services.




Power Profile

Lipiec, Martocci, Gore and D’Arcy.
In New York, M&T Bank’s real estate portfolio has grown significantly over the past few years. Executives cited, between 2009 and 2011, an increase of $1.1 billion—up to $5.6 billion. To get some insight into the bank’s success, The Commercial Mortgager met with some of its top executives who gave an unfettered glimpse into the approach that has helped keep the bank a lending powerhouse. “We really started out here as a multifamily lender but it’s really evolved into a much broader set of commercial real estate products and it’s really across the board,” Gino Martocci, the bank’s regional president for New York City and Long Island, said in his office recently. “In fact our largest concentration is in urban retail.” He added that after retail comes office, multifamily, “other” and hotel. “As a subset of ‘other’ we’ll do construction and transition real estate as well—transition defined as it needs to be repositioned somehow.” Mr. Martocci described the bank’s approach as “pretty conservative,” but was quick to add that it doesn’t shy away from deals that contain “an appropriate level of risk.” Asked what that might include, he pointed back to the transitional real estate deals that it put together several years ago, as the financial crisis gripped many lending institutions. “We were one of the few lenders out there willing to do an asset that required respositioning during 2010, even 2011,” he said. “It’s changing to some degree now, but we made a good many loans. Or construction loans in 2011—we were one of the more active construction lenders for the right sponsors, for the right people that we’ve done business with for a very long time.” Recurrent themes in its lending strategy seem to include the familiarity that Mr. Martocci mentioned, as well as the maintenance of a healthy balance sheet. In some ways both have helped it to maintain calm in the midst of chaos. Peter D’Arcy, a group vice president at the bank and a senior group manager in the Commercial Real Estate division, pointed out that top players rely on it for both. “The last four or five years—we were so clean because the competition was so broken,” Mr. D’Arcy said. “The top names in the marketplace needed flexibility but they also needed a company with a balance sheet and we made so many client acquisitions that—we sort of came into our own from a size standpoint, where our capabilities of what we could do for the top tier of New York City as a bank really wasn’t different from a hold standpoint

or an underwriting ability than many of the big money center banks.” The company is smaller, yet less bureaucratic—conservative, yet opportunistic. “I think the point is that we’ve always been conservative and the consistency is what some of these bigger clients like,” added Jason Lipiec, a group vice president in Commercial and Private Banking at M&T. “In good times we’re not the most aggressive but they know if we give them the deal, the deal’s going to close. And in bad times no one else is out there and because of the safety of our balance sheet and the fact that we didn’t get ahead of ourselves, we were able to be there for them.” D’Arcy added that the bank’s approach has provided a good mixture for the marketplace. “We’ve expanded the names of who we deal with over the last couple of years in a way that we haven’t since I’ve been here,” he said. Which leads to the concept of institutional memory. Many of the top executives at the bank have been there for decades—Mr. Martocci joined 17 years ago, Mr. D’Arcy the same, and Mr. Lipiec 15 years ago. “One of the things that really differentiates M&T from a lot of the lenders,” Mr. Martocci said, “is that management has been the same management for 25 years. The low turnover allows for a great deal of institutional memory, and institutional memory is critical for protecting your balance sheet and making loans and making sure you’re choosing not only the right kinds of loans but the right people to do business with.” He estimated that roughly 25 percent of the bank is held by insiders. These include Warren Buffett as well as the chairman and CEO of the bank, Robert Wilmers and Mr. Wilmer’s original investment committee and management. “For an $11 billion or so, $10.5 billion market cap,” Mr. Martocci said, “it is highly unusual—highly unusual, to have such a great deal of insider ownership.” So how does the bank keep a fresh and talented group of newcomers streaming in? Martocci cited its Executive Associate Program, which he said has been crucial since Mr. Wilmers arrived in 1983. “Our EA program recruits people from some of the best graduate schools in the country—Wharton, Northwestern, Columbia here in New York and NYU,” he said. “We bring them in to the bank early and we help foster their growth and promote them to senior positions as appropriate and as they prove themselves so this keeps the talent and the blood flowing and the intelligence level and the intellectual capital high.” He then named a number of high-level executives that had come through the program—including the bank’s current CFO Rene Jones and vice chairman Mike Pinto. In M&T Bank Corp.’s 2011 Annual Report, Mr. Wilmers highlighted many of that year’s most notable events across the bank and one that stands out, and which will provide additional services to clients, executives said, was the acquisition of Delaware’s Wilmington Trust Corp.

“In good times we’re not the most aggressive but they know if we give them the deal, the deal’s going to close. And in bad times no one else is out there and because of the safety of our balance sheet and the fact that we didn’t get ahead of ourselves, we were able to be there for them.” —Jason Lipiec



“The environment that we live in today where there’s a lot of volatility. People are more focused on preservation of capital and they seek out firms like ours. People are seeking out additional information, they’re benchmarking their existing vendors and providers for those types of things and they’re also very concerned about mitigating risks.” —Lawrence Gore
“Wilmington Trust and affiliates brought with them some $50 billion of assets managed for an array of financially substantial individuals and corporations, increasing our year-over-year revenue from trust related services by 171 percent,” Wilmers wrote in the report. The sale went through in May 2011 for a reported price of $351 million and made M&T Bank the largest bank in Delaware. It added $10.8 billion of assets and $8.9 billion of deposits to its balance sheets. Notably for New York tri-state, however, was the access it gives M&T’s high net worth clients—venerable, large family owners of commercial real estate—to trust and estate planning. Lawrence Gore, president of Wealth Advisory Services at Wilmington Trust, told The Commercial Mortgager that the firm’s two major focus areas—wealth and investment management—dovetail nicely with M&T’s roster of wealthy tri-state clients. “The environment that we live in today where there’s a lot of volatility,” Gore pointed out, “people are more focused on preservation of capital and they seek out firms like ours. People are seeking out additional information, they’re benchmarking their existing vendors and providers for those types of things and they’re also very concerned about mitigating risks.” Mr. Gore’s team in New York is 26 strong, Mr. Martocci added, which will allow it to serve those bank clients looking to mitigate the risks that Mr. Gore referenced. “We have a great many clients who we’ve been banking since the 80s and 90s and I’d say they were worth $15 million or $20 million back in the 90s,” Mr. Martocci said. “Well they’re worth $250 million today. To varying degrees they’ve done their estate planning— some not at all, some a great deal—to varying degrees they’ve got good wealth management. Typically a lot of real estate guys don’t put a lot of money in equities because they feel like they have enough risk, but nevertheless many still do. But everybody’s in need of good estate planning, good succession planning. And Wilmington Trust really brings that to the table in a world class way, in a way frankly that M&T really didn’t have up until this acquisition.” Another bonus for the bank The Commercial Mortgager wanted to hear about was its advisory board in the tri-state area. The mortgage investment committee, as Mr. Martocci calls it, is made up of eight outside directors, as well as some internal directors. They vote on every loan made in New York City and Long Island.

“It’s been a tremendous asset,” Mr. Martocci said of the committee. “Because of this board, you think about a piece of real estate differently than most bankers.” Sometimes the news for a potential borrower is good, sometimes it’s not what they might have wanted to hear, but because of the committee’s insights it that news always includes some clues the borrower might use the next time around. “You’ve sort of given a man a fish in that moment but you’re also teaching a man to fish because the next time that they go back, they’re thinking about that,” said Mr. Martocci. “Or the next time that they have a conversation with a client, they’re thinking in a way that a mortgage committee member might be thinking about a piece of real estate. Now that’s leavened with obviously the bank’s credit culture and the discipline of banking, but the expertise or the understanding of a piece of real estate is greatly enhanced by having this committee asking the questions of the relationship managers and group managers. We’re all there and it’s just a huge benefit to the team, not only as a piece of information and also an informational advantage as it relates to real estate.”

Gino Martocci.




Power Profile

Matt Galligan
On CIT Group’s New Real Estate Finance Division

Newcomer to sector takes Bet oN Former BaNk oF IrelaNd executIve’s luck


hen Bank of Ireland was ordered by regulators to deleverage in the midst of the debt crisis that was roiling Europe, it meant letting go of a portfolio of well-performing U.S. real estate loans.

It was a development that Matt Galligan described over lunch one drizzly and dreary afternoon as “heartbreaking.” At the time, Mr. Galligan was Bank of Ireland’s managing director and head of U.S. Property Finance, having joined in 2007 to start the group. Some four years later he was helping to wind it down. “They did not want to sell that portfolio,” he said. “But it was the only opportunity that they had to repatriate capital.” After an experience like this, many people might balk at the thought of once again starting something new. But Mr. Galligan, and the bulk of his Bank of Ireland team, is doing just that—launching a real estate finance division at CIT Group on the heels of its emergence from bankruptcy protection. Analysts are taking note of the move. Guggenheim Partners’ Jeffrey Davis said that, along with a refocusing along its core businesses—these include transportation and

equipment leasing as well as financing—the arrival of Mr. Galligan and his colleagues is a positive sign. “CIT wouldn’t have hired them if they weren’t committed to the business,” Mr. Davis said over the phone recently. “I think from 10,000 feet it looks to be a really good fit for CIT. If you’re an investor, I think you like it because it provides diversification. Secondly, as I understand the situation, we have a lot of commercial real estate mortgages that are financed elsewhere that are looking for new balance sheets.” Back at lunch, Mr. Galligan said that he had just returned the previous day from a scouting trip of sorts. “We were in northern Vermont yesterday looking at an office deal coming out of the CMBS market,” he said, adding that the team has a “good feel for what’s in their wheelhouse.” And they should. That wheelhouse includes much of the same geographic targets that made up Bank of Ireland’s portfolio—gateway cities such as New York, Boston and Washington, DC. Asked whether the move into commercial real estate finance was by its nature at odds with any effort to fine-tune the company’s core, Mr. Galligan referenced the gap that the lack of real estate product left in CIT’s roster of businesses. “I think the executives here looked at the businesses that we did have, and across each line of business we were a



Power Profile

senior secured lender,” he said. “The only product type that we were not playing in—and it was a vast hole—was this real estate product type.” Since Bank of Ireland’s team was essentially taken as a whole and dropped in to fill that vast hole, it becomes a much less risky move. Plus, as Mr. Galligan added, the company figured that “if it could be done on a moderately leveraged basis in both the middle market and in the larger trophy assets, then they were interested in being in the business.” The move came about as the Bank of Ireland portfolio was being shopped around. CIT looked at the portfolio and passed. It ultimately went to Wells Fargo for roughly $1.2 billion. It sold at a premium. Wells later bought Bank of Ireland’s Burdale Financial Holdings Limited and Burdale Capital Finance’s portfolio of loans, about $1 billion outstanding in the U.S. and United Kingdom. During the marketing of the loans, CIT Group and Mr. Galligan started talking and an agreement was reached to do a lift-out of his entire team. Paul McDonnell, head of the Property Finance Group at Bank of Ireland, told The Mortgage Observer that Mr. Galligan and his team had worked professionally throughout the closure of the business. He also underscored the success the portfolio had achieved. “We had a very good experience with Matt—he did a fantastic job for us,” Mr. McDonnell said. “I think that the best way to confirm that was the success that we had with our book over there. And when we had to sell it—and we had to sell it in terms of broader issues—we achieved a very strong price for it. A lot of that I would put down to Matt’s management of the business.” An announcement went out over the wires at the beginning of November 2011. CIT Group Inc. president Nelson Chai heralded the arrival of Mr. Galligan and his team as indicative of CIT’s focus on opportunities for growth. “The deep relationships and industry expertise of our team will enable us to capitalize on market conditions while pursuing a conservative approach in middle market commercial real estate financing,” Mr. Chai said in a prepared statement at the time. He added the launch highlighted a “focus on growth opportunities and efforts to source and build assets at CIT Bank.” The road to CIT Real Estate Finance—his fifth start-up, no less—has taken Mr. Galligan through a long list of familiar bank names. He grew up in Wallingford, Conn. and attended college in Worcester, Mass. at the College of the Holy Cross. He and his wife, whom he met at Chase, have two sons and live on 41st Street, an easy walk to his new office. Personal projects include golf, travel and reading (on a recent trip to Aguadilla on Puerto Rico’s western coast, he worked his way through His Way: The Unauthorized Biography of Frank Sinatra, by Kitty Kelley). He meditates twice a day. Professionally, he got his start in the Chase global credit training program. While finishing up the program, he met and started doing some analytical work for William McCahill, who retired last October from Capital One, where he was an executive vice president. The two became mentor and mentee. Reached at his home, Mr. McCahill told The Mortgage Observer that he saw at the time “a fantastic young guy—very bright and energetic.” After 10 years at Chase, where he left as a vice president and team leader in the Real Estate Department, Mr. Galligan went to the Bank of Boston. There, he created and managed its real estate distribution process— structuring, arranging and placing multi-bank syndications. Recruited to run its syndications desk, he rejoined Mr. McCahill at Fleet in 1996.

I think from 10,000 feet it looks to be a really good fit for CIT. If you’re an investor, I think you like it because it provides diversification. Secondly, as I understand the situation, we have a lot of commercial real estate mortgages that are financed elsewhere that are looking for new balance sheets. —Jeffrey Davis, Guggenheim Partners

“He became what I would label the high priest of the syndications world,” Mr. McCahill said of his friend. “He was by far, I think, the most respected banker in putting major syndicated deals together. That reputation really put Fleet into the big leagues, so we were able to do $200 million and $300 million deals because we knew Matt and his group could sell them down very quickly.” When asked about the title later, in CIT Group’s offices, Mr. Galligan shunned the credit. “He’s being very modest,” he explained. “He’s really who put Fleet into the big leagues here in the city.” But structuring syndicated loans was definitely an area of focus, and one that provided him with a plethora of contacts. “I syndicated debt for 15 years, and that’s how I established a lot of my contacts here in New York, because I was here for 10 and then I went to Boston for 20, but I was constantly on the phone with bankers in New York,” he explained. “And I got into that business when it was developing so I was one of the early guys, and I’ve gotten to know an awful lot of people as a result of it.” At CIT Group’s midtown offices, homage is paid to one of the bank’s primary business areas. The bank is a leading aircraft lessor and dozens of aircraft models line cabinets and walls on the route back to the area where Mr. Galligan and his team sit. By industry, commercial and regional airlines comprise the largest chunk of the assets in its portfolio, at 25.9 percent. And as of December 31, 2011, transportation finance was a $13.3 billion portion of the bank’s business. Student lending—originations ceased by April 2008—still made up 18.5 percent as of its assets at the time, followed by manufacturing, at 12.9 percent. Its total assets, as of December 31, 2011, were $45.3 billion and total loans decreased from $21.9 billion to $19.9 billion over the fourth quarter of 2011, mainly due to the termination of student loan originations and the transfer of $2.2 billion of student loans to held-forsale status. Mr. Davis, at Guggenheim Partners, said that a part of this new chapter for CIT Group “is a return of CIT to being a more active lender after having reduced its loan and lease portfolio by about 50 percent from where it was pre-crisis.” So with its focus on top-tier sponsors and developers in major cities, what kind of loans might come out of CIT Real Estate Finance? “Well, first of all, what we’re looking for is not necessarily the largest developer,” Galligan said when asked that question. “We’re looking for one that’s kind of best-in-class. We typically would like developers that are building very close to the urban core because we think that there’s less risk being associated with the marketplace because there are much higher barriers to entry.” One recent project the bank financed is Edgewater Harbor, a 24-acre mixed-use industrial complex that is being converted into 495 residential units and 100,000 square feet of retail and restaurants. The project is being undertaken by National Resources, whose president, Joseph Cotter, called Mr. Galligan “the right blend of the traditional relationship banker and a market-savvy New York real estate lender.” Relationships and character seem to be key themes, in fact. In addition to terms like “best in class” and “urban core,” Galligan referenced “the three Cs” in talking about what he looks for in a borrower—character, capacity and capital. “The driver there is character,” he said, “if the people are going to do the right thing when it’s easy to walk away and leave us with a property and perhaps a loss.” As to how well capitalized a borrower needs to be, he indicated that it depends on the



project. “There’s no specific dollar limit on it,” he said. “It’s pertinent to the project. We’re generally getting 30 percent or more equity in the deal up front and very often they’re using third-party sources of capital—private equity money or one of the other sources out there—so it’s not necessarily all their capital. And it varies by transaction as well—the larger transactions, if you’re doing a $100 million deal you might want $50 million in capital where if you’re doing $25 million deals you might want $8 million.” As CIT Real Estate Finance forges ahead, and looks to carve out its place alongside the bank’s other businesses, Mr. Galligan seemed calm about his latest startup, and having taken on something new, though familiar. “I really like the early stages—particularly of developing a business,” he explained. “One of my key strengths is that I’m able to get people to really give their all to what they do and that’s one reason I try to be enthusiastic—if I’m giving my all to this, then perhaps it’s also what they do.”

The driver there is character—If the people are going to do the right thing when it’s easy to walk away and leave us with a property and perhaps a loss. —Matt Galligan, CIT Real Estate Finance

CIT Real Estate Finance is off to a fast start. Here’s a look at some recent deals that Mr. Galligan and his team there have closed.
One57—CIT Real Estate Finance closed on a $50 million commitment
in a $700 million syndicated construction loan. Bank of America was administrative agent on the deal. The loan is funding 50 percent of the construction costs associated with putting Extell Development’s 90-story, mixed-use residential and hotel tower up. One57 will include a 210-room ParkHyatt Hotel topped by 95 luxury residences.

outside the financings his group will ordinarily target, CIT Real Estate Finance recently closed on a $50 million commitment in a $285 million syndicated term loan to refinance the original construction loan for the Hilton Orlando. HSBC was administrative agent for the 1,417-key, four-star hotel’s loan. to partially finance the 70-unit condo conversion of the National RE/Sources project.

Hilton Orlando—In a deal that Mr. Galligan conceded was a bit

Edgewater Harbor—This $25 million construction loan will be used



Simon Ziff / Ackman-Ziff


or our Q&A, The Mortgage Observer caught up with Ackman-Ziff’s Simon Ziff. We touched on a wide range of issues—from how no love for clothes led to a start in commercial real estate to the volume of debt and equity his firm might help place this year.
It sounds like more senior people. Will you be hiring more junior folks as well? Well, we are obsessively recruiting junior people, probably more so than any firm. We have been forever. We recruit at all the top business schools every year. We generally hire second-year MBAs in the summer, and we generally hire people with five to seven years of work experience and a masters for our junior positions. Do you look for any particular qualities in the new talent that you hire? Yes. Probably seventy-five percent of the associates we hire are technically excellent in finance. And twenty-five percent has to be technically excellent with a potential salesmanship—because our model is not to get salesmen. It’s to have what we call an execution model, which is to have the best execution people, not origination people. To have execution people, we believe once a client, always a client. So we have very few natural salespeople who are hired for their salesmanship. But we have an incredibly analytical group. Do you anticipate being active in a lot of debt placement this year? About seventy-five percent of our business is debt placement, and roughly twenty-five percent is joint venture equity, or sales, and we’re having a very busy year. Interest rates are still low, but as they begin to rise, with so much of your business focused on debt placement, any concern that that might negatively affect business? Not at all. People that we represent generally have to do things. Over half our business are institutional borrowers, and they remain active. If rates go up a hundred basis points, they’ll continue to be active. If they go up a hundred and fifty basis points they’ll probably continue to remain active. We’re not in the commodity financing business— we’re more in the structured arena. I see. And what volume of equity and debt do you predict placing this year, or helping to put in place? We’re boutique, so our goals are probably to do somewhere between two and a half, three billion of debt equity.

The Mortgage Observer: I was wondering if you could talk a bit about how you got started in the real estate business. Simon Ziff: I grew up in central Pennsylvania, and my family was in the clothing business, but I knew I didn’t want to stay in the clothing business. I majored in finance at Penn State, and my junior year, I took a real estate course and decided that this was something that I could do anywhere. Knowing that I didn’t want to return to my hometown, I needed a profession where I could go anywhere in the country. I thought real estate was great for me because it involved finance, which I enjoyed, and I felt that it involved entrepreneurialism. So this course got me very excited. Penn State had a real estate program, and I ended up taking four real estate courses, directing all of my efforts to find a position in real estate. And I was very fortunate that Mass Mutual recruited at Penn State my senior year, which was not an easy year to get a job—1987. They recruited six kids nationally at schools, including Wharton, and they took one from Penn State. And you also took classes at the NYU Schack Institute of Real Estate, is that right? Yes, after a year in Springfield, they decided to send me to Chicago, and then I applied to the NYU Masters in Real Estate program, which I ultimately graduated from. How about your firm? Do you anticipate growing this year? I know that you were growing a lot in past years. What do you see happening now? We have had a very focused business plan for many years. And while—probably twice a month someone comes to us with what I would call an add-on business or an extension, or something that people feel is a natural for us to be doing—we rarely do anything. We added a joint venture equity practice over ten years ago. We feel that we are the best today at doing that. We added hotel sales a few years back, and this week we brought in two very old friends of mine whom I’ve known for twenty years from philanthropy and through the industry. One, Marc Warren, will help expand our business—generally with our existing business lines. The second, David Robinov, who I think was eighteen years at Eastdil, will be expanding our sales brokerage business beyond hotels into retail, and eventually, office and multifamily.

Any predictions about CMBS issuance for the year? I don’t have a number prediction, but I do think that we’ve seen CMBS spreads spike up and down over the last two years, and eventually they’ll spike down, I think, to a level where they’ll be more competitive and will become a more significant part of the overall financing markets. Having said that, the past two years they’ve been a fairly insignificant part of our practice. Over the last three years, they’ve been fairly insignificant—a quarter to a third, maybe a quarter of our business. As far as lending in general is concerned, do you think it’s loosening up a bit? Easier to get financing? For stabilized assets the market has, I think, generally and steadily improved. And on transition assets, there’s still a fairly inefficient market. Any thoughts on distress in the city and where it’s focused? Certainly in the boroughs, there is some... We’ve recapped a few busted residential deals in the boroughs, but beyond that, we haven’t seen much distress.

Must-read commercial real estate e-newsletter

All the deals. All the news.
delivered to your inbox 3 times a week
For advertising opportunities, contact Robyn Reiss, Associate Publisher,

Read it here first.

scheme of things

Monthly Charts
February’s top lenders. A look back at February of last year shows how the stack has rearranged.

The Mortgage Observer has compiled a month’s snapshot of top commercial real estate financings in the five boroughs of New York City—including top lenders, most active property types, cap rates and the zip codes that saw the most action. We look back in time a bit, too, to put the activity

into a larger context. Check back each month, as we’ll target different areas to spotlight. The data is collected from Actovia, a cloud-based system that tracks mortgage information and streamlines leads, from city records. Accordingly, it reflects the date the city recorded the transaction.

Top Lenders, By Transaction

Most Active Zip Codes
What a difference a year makes. So far, 2012 financing activity has been bolstered by an uptick in Williamsburg’s development scene as well as a rush of activity in the East Village and Lower East Side of Manhattan. Neither really registered in 2011.



scheme of things

Financings by Property Type
Not surprisingly, data showed that Multifamily/Co-op properties saw the most financings—both this February and last. In fact, most property types followed last year’s trends, with one exception being vacant properties, which saw nearly twice the amount of activity in February 2012.

Cap Rates
Thanks to data from Massey Knakal Realty Services, The Mortgage Observer can give insight into where cap rates stood the past several months.

Mortgage origination data is provided by Actovia and taken from recent listings of mortgages filed by New York City.



Stein’s law

Guaranties Bite
by Joshua Stein
It’s only a nonrecourse carveout guaranty—nothing to worry about, right? Well just don’t file bankruptcy, mess around with the collateral or get up to other mischief. It’s still a nonrecourse loan. That was the mantra for thousands of commercial real estate loans that closed in the boom years. And everyone believed it—until recently, when some nonrecourse carveout guaranties started blowing up in the faces of guarantors, in ways that no one ever envisioned. Opportunitistic loan purchasers have scrutinized the fine print of the nonrecourse carveouts. Using that fine print and interpretations that were never anticipated, the loan purchasers are demanding that “carveout guarantors” pay the entire loan under circumstances that no one ever thought would trigger such liability. In one Michigan case, Cherryland Mall, the loan documents required the guarantor to pay the entire loan out of its personal assets if the borrower didn’t remain a “single purpose entity.” One of the single purpose entity covenants (covering ground that would typically fall under a different provision of the loan documents) required the borrower to stay “solvent.” The collateral value dropped below the loan balance, the loan went into default, and—bingo!—the loan holder successfully claimed that the borrower was insolvent, so the guarantor faced liability for the entire loan. The documents in another Michigan case, Chesterfield, produced a similar surprise. Here, the guarantor had to pay the loan if the borrower didn’t comply with “separateness covenants.” One required the borrower to pay its debts from its own assets. When the borrower stopped paying the loan, the lender claimed

Regardless of how today’s litigations turn out, tomorrow’s loan negotiators now know about one more problem area on which to focus. And deal sponsors may “just say no” when asked to sign nonrecourse carveout guaranties. The risk of surprises is just too great.

the guarantor became personally liable for the entire loan. The court agreed. These two cases have shocked the commercial real estate lending community, by making a guarantor liable for the whole loan at exactly the point—loan default—where nonrecourse treatment matters most. Any nonrecourse loan fundamentally contemplates that if a property gets into trouble, the borrower can walk away without liability. The borrower and its principals are not supposed to place their “other assets” at risk if the collateral can’t support the loan. The borrower has choices very much like dealing with a pawn shop, at a different stratum of the credit market. The two Michigan cases may represent the beginning of a trend, though, where opportunistic loan purchasers scrutinize a nonrecourse carveout guaranty, and assert claims against guarantors in ways that no one ever expected. In other cases, innocent or trivial actions by borrowers have been asserted as the basis for triggering claims under nonrecourse carveout guaranties. We can expect to see more of this. In one case, a limited liability company borrower wasn’t supposed to change its business purpose— but someone foolishly and probably innocently amended the organizational papers to broaden the company’s permitted activities. This, again, violated the single-purpose entity covenants and—again, bingo!— the lender claimed the guarantor had to pay the entire loan. Mortgage/mezzanine financing structures offer fertile ground for these claims. In one case, the mortgage lender foreclosed. The mezzanine lender said this was a prohibited transfer, triggering the nonrecourse carveout guaranty for the mezzanine loan. The court ultimately didn’t buy it, but the guarantor spent many months in litigation to get there.

The converse situation could also produce surprises: a mezzanine lender forecloses, takes control of the mortgage borrower, and throws it into bankruptcy. Next thing you know the mortgage lender can sue the carveout guarantor for the entire loan, because the mortgage borrower filed bankruptcy. In a pending case, the lender is claiming the guarantor must repay the entire loan because the borrower incurred levels of indebtedness—in this case, ordinary unpaid trade payables—that violated the loan documents, and didn’t remove some mechanics’ liens. In all these cases, everyone expected that the ordinary vicissitudes of commercial real estate were part of the lender’s risk—not the guarantor’s risk—when the parties negotiated their loans. But aggressive loan purchasers have sometimes been able to interpret loan documents in a way that no one would have anticipated, and in fact in a way entirely inconsistent with the underlying theory and deal structure of nonrecourse financing. We are probably not done with surprises in this area. Regardless of how today’s litigations turn out, tomorrow’s loan negotiators now know about one more problem area on which to focus. And deal sponsors may “just say no” when asked to sign nonrecourse carveout guaranties. The risk of surprises is just too great. Joshua Stein is the sole principal of Joshua Stein PLLC. He acted as an expert witness on industry standards and expectations in two of the litigations discussed in this column. The views expressed here are his own. Mr. Stein can be reached at Joshua@joshuastein.com.

The basis point

The Smartest Guy in the Room
Has cognitive dissonance allowed investors to believe they’re outsmarting each other?

By Sam Chandan, phd
A slow increase in bank lending, competition to finance apartment trades, and hopes for a deeper CMBS pipeline define the outlook for commercial mortgage markets in early 2012. Offsetting these sources of market optimism, threats range from the potential for rising interest rates to waves of maturating loans from the market’s bacchanal days. Months of improving economic data and the coinciding stock market rally have failed to lift the Federal Reserve’s dour assessment of downside risks to growth. The language coming out of the March FOMC meeting acknowledged the improving indicators but also held fast to historically accommodative monetary policy. Extending the commitment to its current targets into 2014, the Fed has put its credibility with investors on the line. Borrowers and bond buyers expect shortterm rates to remain low for another two years, even if the crisis that called for extraordinary interventions recedes further. The Fed has far less control over long-term Treasury yields. Washington’s dereliction in addressing the nation’s fiscal imbalance and our cowardice in encamping on the Cisalpine bank of the Rubicon constrains monetary policy. The maturity extension program is soaking up a surplus of bond issuance but its mettle has not been tested. At least for the time being, the failure of European governance is doing more to keep American interest rates low. If the sovereign debt crisis abates, stanching demand for Treasuries, Operation Twist will prove its ineffectiveness. Over the last two weeks, as Greece has stepped back from the brink, free market mechanisms have made a rare appearance. Rattling investors and providing fodder for the broadsheets, long-term Treasury rates have inched up from their historic lows. Markets have been rattled by their first taste of an inevitable and much larger shift in the cost of capital. The challenges are most acute in the apartment sec-

tor, where the cost of financing has plumbed new depths with the support of government guarantees, fomenting excesses in pricing that are observable in remarkably low cap rates. Asset price bubbles arise when prices diverge from levels consistent with a market that is functioning efficiently. In this efficient market scenario, currently available information with regard to the future performance of an asset is reflected rationally in its price. Since mispricing is therefore rooted in irrational expectations with respect to the present value of future cash flow, the ex ante identification of bubbles is elusive in practice. By definition, the identification of bubbles will be contrary to the market’s widely held views until such time as it deflates. A correct identification may be rejected incorrectly because the market deems it a false positive result. Since the bubble is largely a behavioral phenomenon, a purely statistical exercise cannot settle the matter conclusively. In spite of the inherent complications, the identification of bubbles is not limited in its relevance to policy applications; it has real implication for lending and investment strategy, as well. As the housing crisis has demonstrated, property price bubbles are particularly pernicious. Because of the widespread use of leverage in property markets, the impact of a sharp drop in assets prices may cascade through a mature, interdependent financial system, impacting the availability of credit in unrelated sectors. While the lesson is readily apparent as relates to single-family houses, the market may now be fomenting a bubble in the rental market. As house prices have fallen and households’ tenure bias has shifted in favor of renting, apartment fundamentals have necessarily improved. But prices of apartment properties have been rising relatively faster

than property income, reflecting expectations of continued growth in property cash flow and the availability of low-cost financing. The latter is endogenous in the former since leverage is increasing as a function of fundamentals projections. Exacerbating this dynamic, the government-sponsored enterprises’ position as the dominant source of apartment financing has introduced a unique feature to the market pricing of apartment credit risk. Has the virtuous dynamic of rising fundamentals and exceptionally low-cost credit developed an independent momentum? Across a range of interest rate and underwriting scenarios, my tests of more than $12 billion in fourth quarter 2012 apartment loans show that individual properties are systematically projected to outperform investors’ expectations for the market as a whole. A state of cognitive dissonance is allowing each investor to believe that he has outsmarted everyone else. The credit policy implications of these finding relate principally to the refinancing capacity of newly originated loans. Higher rates of balloon default imply costs that will be borne by agency guarantees and on bank balance sheets, albeit not until current loans mature. For investors in the apartment sector, the findings emphasize a need to identify and circumnavigate segments of the market where financing conditions and aggressive cash flow assumptions have inflated values and where agency financing may recede from the landscape as housing finance reform progresses. Sam Chandan, PhD, is president and chief economist of Chandan Economics and an adjunct professor at the Wharton School. H ecan be reached at dsc@chandan. com. The views expressed here are the author’s own.



In-depth look

With Treasury Yields at Record Lows, Insurance Companies Remain Bullish
by michael stoler
Special to the Mortgage Observer With investment sales volume across the major property types in the U.S. expected to grow by 50 percent to approximately $300 billion according to some sources, there’s a real need for the lending community to provide funds for acquisitions and refinancing. The Mortgage Bankers Association expects loans for commercial real estate to surge this year. The group reported that U.S. commercial mortgage originations are projected to hit $230 billion this year, up 17 percent from $197 billion last year. Commercial and multifamily originations are expected to grow to $265 billion in 2014 and will probably reach $290 billion by 2015. Life insurance companies, once the lifelines of commercial mortgage financing, are expected to increase their debt and equity placements to meet the demand. Approximately 23 percent of the commercial mortgages originated last year were provided by life insurance companies. The American Council of Life Insurers reported total commitment volume of $45.4 billion in 2011, a 48.2 percent increase from the previous year. “Our forecast anticipated continued strength in lending by life companies and the GSEs, increased lending by banks and others, and a slow but steady return in CMBS activity,” MBA vice president of Commercial Real Estate Research Jamie Woodwell said about the group’s predictions. Of the $45.4 billion in commercial mortgage loans originated by insurance companies, the most active lenders were companies based in the NYC metro area. Leading the pack was MetLife, which reported that it had originated $11 billion in commercial mortgages in 2011, compared to the more than $8 billion that it originated in 2010. New Jersey–based Prudential Mortgage Capital Co. originated $9.7 billion surpassing its 2010 level of $9.1 billion, making it the company’s third-largest production year ever. The company announced that it is looking to provide up to $11.6 billion in financing for 2012. Other active life insurance companies include TIAACREF, New York Life, Guardian Life and Pacific Life, as well as Northwestern Mutual Life Insurance Company and Principal Insurance Company. Nicholas Jahnke, director at Northwestern Investment

Management, told me that the company originated approximately $4.7 billion in debt and $2 billion in equity in 2011. The company was active in the local market originating about $850 million for variety of asset classes. “Everyone is in the market to lend and provide equity,” Mr. Jahnke said. “Lots of competition in the market is driving rates down to sub 3.5 percent for fiveto seven-year, and 4 percent for 10Riverbank. year money.” Last year Northwestern provided financing for residential rental apartment buildings, including a $60 million loan on the apartment building Riverbank on West 42nd Street and $115 million in financing for the apartment building at 1510 Lexington Avenue. The insurer provided $270 million in financing for the Staten Island Mall and $87 million for Forest City’s Queens Place Mall. In a club deal with Great West Life, the company provided a $250 million loan to the Canadian REIT, H&R REIT, for its purchase of the 670,000-squarefoot office building Two Gotham Center. Melissa Farrell, managing director at Prudential Mortgage Capital Co., concurred with Mr. Jahnke, saying “everyone is after the same type of deals, making the market very, very competitive. “The insurance companies are working together club deal or syndicating deals over $300 million,” she added. This was evidenced a number of times last year with one major deal specifically, the club deal of MetLife, Prudential Mortgage Capital Co. and New York Life for the $725 million loan on Boston Properties’ office building at 601 Lexington Avenue. Prudential provided $200 million, with MetLife providing $375 million and New York Life with the balance of $150 million in financing. The fixed rate loan, with a 10-year, sevenmonth term, was secured by the 59-story, 1.6-millionsquare-foot, Class A office tower and retail property. Another insurance company that has continued to provide financing in the market is Pacific Life. Last year, the West Coast insurance company teamed up and originated a $500 million fixed rate financing for the joint venture of SL Green Realty and New York State Teachers on the Class A office building at 919 Third Avenue. As I mentioned earlier, many of the major life insurance companies are active purchasers and provide joint venture equity for commercial real estate transactions.

For example, Northwestern Mutual has been a partner with the Albanese Development Corp. in the development of rental properties in Battery Park City, including its latest building—the Verdesian—as well as the Solaire, the first luxury residential property constructed in Lower Manhattan since the 9/11 terrorist attacks. New Jersey–based SJP Properties entered the New York City marketplace in the ground-up development of 45 Park Avenue, a condominium at Park Avenue and 37th Street. Its second condominium development was the Platinum on Eight Avenue and 46th Street, and it’s the developer of the 1.1-million-square-foot 11 Times Square. SJP’s equity partner in all of these developments was Prudential Real Estate Investors. Prudential is also a joint venture equity partner with Roseland Property Co. on many of its residential developments, including the Monaco in Jersey City, which was financed by Northwestern Mutual. TIAA-CREF is a leading financial services organization with $440.7 billion in combined assets under management. Last year, it purchased the residential rental component of the Corner, a luxury rental apartment building at 200 West 72nd Street, for $209 million. A few weeks later, the pension fund manager and institutional investor purchased the land beneath the office building at 425 Park Avenue for $315 million. And earlier this year, it purchased the retail condominium at 2300 Broadway at 83rd Street in the residential condominium tower, paying $44.73 million. In the summer of 2010, TIAA-CREF purchased the 559,000-square-foot, 33-story office tower at 685 Third Avenue, paying about $190 million. In December, Manulife Real Estate, the global real estate arm of Canada-based Manulife Financial Corp., one of the largest life insurance companies in the world and parent of John Hancock Financial, acquired three real estate assets, totaling $555 million. They included 10 Exchange Place, a 748,000-square-foot office tower acquired for $285 million. The acquisition represented Manulife’s entry into the New York City metropolitan real estate investment market and its second acquisition in New Jersey. With yields on 10 year treasuries at 2 percent, these life insurance companies and others are evaluating opportunities to purchase and make direct equity investments in commercial real estate around the nation and in the metropolitan area. Expect this trend to continue for the foreseeable future. Michael Stoler is managing director of Madison Realty Capitol, president of New York Real Estate TV and host of the Stoler Report.

The commercial mortgage and real estate industry’s 10 biggest tickets for April

the schedule

Don’t be the last to understand the pipeline of new taxation, real estate and sustainability law coming down the pike. Join the Real Estate Board of New York as it gathers a host of panelists at its “Proposed Law and Real Estate” panel. Real Estate Board of New York “Proposed Law and Real Estate” seminar, REBNY Mendik Education Center, 570 Lexington Avenue, 5:30-8:30 p.m., contact Indi Jaipal at ijaipal@rebny.com for info


Metropolitan Transportation Authority Chairman Joseph Lhota will be the guest speaker when the New York Building Congress hosts its next breakfast forum at the Trianon Ballroom at the Hilton New York. New York Building Congress breakfast forum, Hilton New York, 1335 Avenue of the Americas, 8-9:30 a.m., visit www.buildingcongress.com for more info


The White Plains region’s new organizer of commercial real estate information and networking events, CapRate Events, will present the Northern Metro Multifamily & Mixed-Use CRE summit. The Northern Metro Multifamily & Mixed Use Commercial Real Estate Summit, White Plains Performing Arts Center, White Plains, NY.,


This New York Real Estate Salesperson class is scheduled to meet for 10 days, Monday through Friday, April 9-20, between 9 a.m. and 5:30 p.m. The final exam will take place on Friday, April 20. The New York University Schack Institute of Real Estate 75-hour New York Real Estate Salesperson Course, April 9-20, Midtown Center, 11 West 42nd Street, Fifth Floor, contact Sal Gulino at 212-9923305 or Sg7@nyu.edu for more info.


These quiet tree-lined streets near the Hudson River from West 96th Street to West 110th Street boast some of New York’s finest remaining turnof-the-century row houses, apartments, institutional structures and public monuments, often designed by leading architects. Municipal Art Society “Bloomingdale Blocks” walking tour, meeting place will be provided upon registration, 2 p.m., call 212-935-2075 or visit www.mas.org




The 25th Annual Commercial Real Estate Awards Gala will be presented by the New Jersey Chapter of the National Association of Industrial and Office Properties. Robert Lieb of the Mountain Development Corp. will receive the Lifetime Achievement Award and Andrew Merin of Cushman & Wakefield will receive the Impact Award. National Association of Industrial and Office Properties 25th Annual Commercial Real Estate Development Awards, The Palace at Sommerset Park, Somserset, N.J., visit www.naiopnj.org/25gala for more info.

Prudential Douglas Elliman’s Faith Hope Consolo will be among the honorees receiving Mercy College’s Trustee Medal at the school’s 31st Annual Trustees event. Mercy College Annual Trustees Scholarship Dinner, the Plaza Hotel, 6:309:30 p.m.,




Thousands will attend the International Council of Shopping Centers event when it comes to Las Vegas this year. International Council of Shopping Centers, Las Vegas Convention Center, Las Vegas, May 21-23, visit www.icsc.org/2012RECON/ index.php for more info





Learn the inside secrets of top brokers when the Real Estate Board of New York hosts its “Inside Secrets of Top Brokers” seminar. Real Estate Board of New York “Inside Secrets of Top Brokers” seminar, REBNY Mendik Education Center, 570 Lexington Avenue, 5:30-7 p.m. call 212-532-3100 for more info

Massey Knakal Realty Services is hosting the second annual Commercial Real Estate Investment Summit, with guests that will include headliner Michael Fascitelli of Vornado Realty Trust. Commercial Real Estate Investment Summit, New York Bar Association, 42 West 44th Street, 8:30 a.m. to 3:30 p.m., visit http://mkcresummit.com/register



of interest

A comprehensive index of all the people, places, addresses and companies mentioned in this month’s issue

A AG Net Lease Fund II 15 Albanese Development Corp. 30 Alexico Management Group 10 American Council of Life Insurers 4 Angelo, Gordon & Co. 15 Anglo-Irish Bank 12 Ariel Property Advisors 9-10 Australian Stock Exchange 12 B Bank of America 10, 22 Bank of Boston 21 Bank of Ireland 12, 20-21 Baydala, Terry 12 Bellwether Enterprise Real Estate Capital 6, 8 Bellwether Enterprise Community Investment 6 Berkeley Point Capital 6 Blackrock Group 12 Blackstone Group 6 Blackstone Real Estate Debt Strategies 6 BNB Bank 8 Bolivian Consulate 15 Boston Properties 4, 30 Buffet, Warren 18 Burdale Capital Finance 21 Burdale Financial Holdings Limited 21 C Canyon-Johnson Urban Funds 10 Capital One 21 CBRE 6 Chai, Nelson 21 Chase Bank 15, 21 Cherryland Mall 28 Chesterfield 28 CIT Group 12, 20-21 CIT Real Estate Finance 12, 22 Citrin, Jeffrey 10 College Green Branch 12

Compo Acres 10 Cotter, Joseph 21 Criimi Mae 12 Cushman & Wakefield Sonnenblick Goldman 10 CVS 10 D D’Arcy, Peter 18-19 Darinor Plaza 10 Davis, Jeffrey 20-21 Day, Jeffrey 6 Deutsche Bank 6 Deutsche Bank Berskshire Mortgage 6 Draft/Foote Cone & Belding 6 Duncan, Pat 10 E Eastgate Realty 15 Edgewater Habor 21-22 Ehlinger, Mark 10 EMEA Research & Consulting 6 Emmes Asset Management 12 Enterprise Community Investment 8 Extell Development 22 F Fannie Mae 6 Farrell, Melissa 30 Federal Housing Commission 6 Federal Housing Finance Agency 6 Feldstein, Thomas 12 Fitch Ratings 12 Fleet 21 Forest Avenue Shopping Center 10 Fox, Adam 12 Freddie Mac 6 G Galligan, Matt 20-22 Gamestop 6 Garodnick, Daniel 15 GEM Hotel Union Square 4 German American Capital

Corp. 10 Gore, Lawrence 19 Graves Hospitality Corp. 4 Great West Life 30 GTIS Partners 12 Guardian Life 30 Guggenheim Partners 20 H H & R REIT 30 Haddock, Michael 6 Harbors at Haverstraw 15 Helios Capital Advisors 8 Heyman Properties 10 HFF 15 Hilton Orlando 22 Hotel Williamsburg 4 HSBC 15, 22 Huffman, Ned 6 I Invesco Advisors 10 J Jahnke, Nicholas 30 JC Penney 6 John Hancock Financial 30 Jos. A. Bank 10 K Kaufman, Randi 12 KBS Realty Advisors 12 Kelly, Kitty 21 Kimco Income Operating Partnership 10 Kimco Realty Group 10 King & Grove 4 Klein, Michael 15 Kohl’s 10 Krueger, Liz 15 KSK Construction Group 4 L LandesBank 15 LaSalle Hotel Properties 10 Lesser, Daniel 4, 6 Lindwalk, Chuck 12 Lipiec, Jason 18-19 Lockhart III, James 6 LW Hospitality Advisors 4 M M&T Bank 16-19 Madison Realty Capital 8-9, 12

Malka, Josh 8 Manhattan Mall 6 Manulife Financial Corp. 30 Manulife Real Estate 30 Marcus & Millichap Capital Corp. 15 Martocci, Gino 18-19 Mayrose Holdings LLC 15 McCahill, William 21 McCarthy, Brian 10 McDonnell, Paul 21 Merck, Robert 4 Meridian Capital Group 12 MetLife 4, 30 Miami Equity One 10 Michael’s 10 Monoghan, John 12 Morgan Stanley Mortgage Capital Holdings 15 Mortgage Bankers Association 30 Mountain Development Corp 10 N National Resources 21 New York Life 4, 30 New York State Teachers 30 Northfield Bank 8 Northwestern Investment Management 30 Northwestern Mutual Life Insurance Company 30 NYU Schack Institute of Real Estate 24 O Off-market RADAR 10 Old Navy 10 One57 22 Orvis 10 P Pacific Life 30 Pariser, Evan 15 Park Central Hotel 10 Park Hyatt Hotel 22 Parkside Apartments 15 Payless Shoes 10 Polo Ralph Lauren 6 Post Road Plaza 10

Principal Insurance Company 30 Prudential Capital Co. Prudential Mortgage Capital Co. 4, 30 Prudential Real Estate Investors 30 Q Queens Place Mall 30 R Ranieri Real Estate Partners 6 Ratner, Jonathan 12 Real Estate Capital Revlon Consumer Products Corp. 15 Richter & Ratner 12 Riverbank 30 Rock, Steven 15 Roseland Property Co. 30 S Schultz, Steven 8 Seats, Lamar 6, 8 Shapiro, Tom 12 Shulman, Ben 8 Silverstone Property Group 9 Sinatra, Frank 21 SJP Properties 30 SL Green Realty 30 Solomon, Craig 10 Sozio, Victor 9 Specialist Business Banking 12 Square Mile Capital 10 Stein, Joshua 28 Stoler, Michael 30 Sunkyo Mahikari 15 T The American Council of Life Insurers 30 The Corner 30 The Moinian Group 15 The Platinum 30 The Solaire 30 The Verdesian 30 TIAA-CREF 30 Tishman Speyer 12 TJ Maxx 10

Trader Joe’s 10 Two Gotham Center 30 U USAA Real Estate Co. 10 U.S. Bank 15 V Vaccaro, Jon 6 Victoria’s Secret 6 W Wells Fargo 21 Werhane, Charles 8 W. 27th Street Rental LLC 15 Westside Congregration of Jehovah’s Witnesses Inc. 15 Wilmers, Robert 18 Wilmington Trust 16-19 Wilsmann, Mark 4 Wind-Up Entertainment 15 WL Ross & Co. 6, 10 Woodwell, Jamie 30 Z Zegen, Joshua 8-9 Ziff, Simon 24 # 10 Exchange Place 30 100 Wall Street 15 100 West 33rd Street 6 1000 Madison Ave 10 11 Times Square 30 1510 Lexington Ave 30 1540 Broadway 4 160 North 12th Street 4 200 West 72nd Street 30 2100 Round Pointe Drive 15 211 East 43rd Street 15 2121 State Route 27 15 2300 Broadway 30 374 Post Road East 10 425 Park Ave 30 430 Boston Post Road 10 45 Park Avenue 30 500 Connecticut Avenue 10 537 West 27th Street 15 601 Lexington Ave 4 72 Madison Avenue 15 870 Seventh Ave 10 992 Madison Ave 10



It’s Not The Size of Your EMS That Matters, It’s The Payback

for Energy Management in Smaller Properties
USE Controller ECS is an intelligent device that manages the transfer of energy usage data from sensors and meters strategically placed throughout 4-20 unit buildings. USE Controller ECS allows you to precisely monitor and control boiler functions based on both interior and exterior temperatures, unlike antiquated heat timing devices that only control cycling of the boiler based on an outside sensor. The boiler turns on for only as long as it takes to deliver exactly the right amount of heat to keep occupants comfort


Call us today for more information: 877.404.7438 ext. 2

a.k.a. “The Mini” Controller

78-40 164th St., Fresh Meadows, NY 11366 | 877.404.7438 | www.use-group.com

When sophisticated institutional owners nationwide seek an entrepreneurial and creative approach, they think of One Firm: Ackman-Ziff. You’re close to the money because we’re close to the money.

Ackman-Ziff Real Estate Group
is pleased to announce that it has recently arranged

Debt Multi-Family Portfolio 500 units
New York

Debt Retail Portfolio 10 Retail Centers.

Debt Office 470,000 sq. ft.
New York

Debt & Mezzanine Office 250,000 sq. ft.
Washington D.C.

Real Estate Capital Advisors www.ackmanziff.com 212.697.3333

You're Reading a Free Preview

/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->