The Insider’s Weekly Guide to the Commercial Mortgage Industry In This Issue

1 Rockpoint Acquires UES Highrise for $218M With Wells Fargo Loan

1 Bank of America Finances Ten Almaden Buy in Deal Brokered by HFF

3 U.S. CMBS Delinquency Declines Further After Hitting Five-Year Low

3 NYCB Recapitalizes 216 East 45th Street

3 Deutsche Bank Finances Related High Line Acquisition

5 Greystone Further Expands Freddie Mac Loan Offering.

5 Hotel REIT Takes $150M unsecured Term Loan Facility

“Dodd-Frank greatly concerns me. We had historic changes to banking rules after 2008.” —Ed Lombardo From Q&A on page 7

Rockpoint Acquires UES Highrise for $218M With Bank of America Finances Ten Almaden Wells Fargo Loan Buy in Deal Brokered by HFF

Rockpoint Group acquired The Wim- The 205,261-square-foot property, built a HFF secured $76.6 million in acquisi- bledon, a 28-story apartment high-rise on few blocks from Central Park in 1980, con- tion financing on behalf of KBS Capital the Upper East Side, for $218 million, or tains 223 apartment units and 6,200 square Advisors for its $116.7 million purchase $977,578 per unit, with a $115 million loan feet of ground-floor retail space occupied of a 309,255-square-foot office building in from Wells Fargo, city records show. by a Citibank branch. downtown San Jose, Calif. The Boston-based real estate investment J.P. Morgan’s asset management arm The three-year, floating-rate loan from firm purchased the luxury rental building bought The Wimbledon from New York- Bank of America was provided to KBS at 200 East 82nd Street from J.P. based investor P&H Associates for REIT III to acquire the property, Ten Morgan Investment Management $150.4 million in 2008. Almaden, from Sam Zell’s Equity Office in a deal brokered by Darcy Stacom The Rental prices at the property in a sale also arranged by HFF, according to and Paul Liebowitz of CBRE. range from $3,500 a month to a release from the broker. The acquisition The acquisition and financing LEAD $15,000 a month, according to data closed last month. closed on Dec. 30, 2014, according from StreetEasy. The 17-story office tower is 89 percent to the deed and loan documents. A representative for Rockpoint leased to a roster of tenants that includes Jason Krane and Patrick Hanlon of said the firm does not respond to media Citibank, Comcast, Robert Half Inter- Ackman-Ziff Real Estate Group brokered inquiries. national, Rosetta Marketing Group and the loan from Wells Fargo, a person familiar with the deal told Mortgage Observer. —Damian Ghigliotty See HFF... continued on page 3

1 | january 9, 2015 Relationship Driven. Execution Focused. 2014 Financing Transaction Highlights

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West 52nd Street Broadway West 5th Street West 57th Street Condominium Conversion 2IðFH5HWDLO3URSHUW\ Cooperative Property Cooperative Property &RQGRV6)2IðFH 190,000 Sq. Ft. 2,585 Units Fee Position $228,500,000 $200,000,000 $200,000,000 $180,000,000 New York, NY New York, NY Brooklyn, NY New York, NY

Club Row Building 1412 Broadway Maiden Lane Vanderbilt Avenue 2IðFH3URSHUW\ 2IðFH3URSHUW\ 2IðFH3URSHUW\ 2IðFH3URSHUW\ 372,000 SF / 14,600 SF Retail 416,000 Sq. Ft. 562,000 Sq. Ft. 686,000 Sq. Ft. $180,000,000 $165,000,000 $145,000,000 $142,000,000 New York, NY New York, NY New York, NY Brooklyn, NY

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Turner Construc- NYCB Recapitalizes tion Company. Ten Almaden, which 216 East 45th Street was built in 1988 and renovated in 2010, Meridian Capital Group scored a contains a three-story $51.5 million mortgage from New York atrium and lobby, a fit- Community Bank to recapitalize a ness center with an 17-story Midtown Man- outdoor pool and a six- MOW hattan office building on level parking structure. EXCLUSIVE behalf of New York-based The building sits on Ten Almaden Bernstein Real Estate, a 1.64-acre site at 10 Mortgage Observer Weekly has learned. Almaden Boulevard, The seven-year loan negotiated by within walking distance to the San Jose Meridian Managing Director Allan Diridon Transit Station. Lieberman carries a fixed-rate of 3.88 Senior Managing Directors Bruce percent, according to the broker. The Ganong and Kevin MacKenzie and Direc- deal closed in late December tor Jordan Angel led the HFF debt place- The 160,000-square-foot office prop- ment team representing the borrower. erty located at 216 East 45th Street, —Damian Ghigliotty between Second and Third Avenues, is fully occupied by tenants including the for-profit educational institution LIM College and AT&T. Bernstein acquired the property for 216 East 45th Street U.S. CMBS $60 million in June 2008 from a sponsor listed in city records as the Janco Real Delinquency Declines Estate Company and most recently in the year,” Mr. Lieberman said about Further After Hitting financed the building with a $44 million the recapitalization. “The lower inter- loan from NYCB in December 2011. est rate and new cash out will enable Five-Year Low “Meridian structured the loan to our client to recoup costs associ- minimize the initial debt service and ated with recent and ongoing capital Trepp’s CMBS Delinquency Rate contin- accommodate several signed leases improvement projects.” ued to slide in December 2014, dropping five whose rent payments commence later —Damian Ghigliotty basis points to 5.75 percent after reaching it its lowest level in five years in November, according to data from the real estate and financial research firm. The delinquency rate for U.S. commercial real estate loans that have been securitized Deutsche Bank Finances Related is now down 168 basis points from 7.43 per- cent in December 2013. High Line Acquisition CMBS loans that were liquidated with losses last month totaled almost $700 mil- The Related Companies has closed on lion and more than $700 million in loans the acquisition of two sites along the High were “cured,” helping to push delinquencies Line for the firm’s latest Hudson Yards down by 13 basis points and 14 basis points, development with a $125 million loan from respectively. Deutsche Bank, city records show. The delinquency rate for hotel loans saw Related acquired the properties at 511- the biggest year-over-year improvement, 525 West 18th Street, a low-rise garage dropping 314 basis points over the course of west of the High Line, and 131 10th Ave- 2014. The delinquency rate for retail loans nue, a parking lot that occupies the full saw the smallest improvement, dropping block between West 18th and 19th Streets, 40 basis points. The delinquency rates for for $205 million. industrial, office, and multifamily loans fell The New York-based mega developer by 291, 205 and 201 basis points, respec- purchased the sites from a partnership 131 10th Avenue tively, according to Trepp. led by investors Barry Haskell, based in “The CMBS market heads into the new Brooklyn, and Matthew Resnicoff, based year with a lot of momentum,” a market in Manhattan, according to the deed. The headquarters building. synopsis from the data firm read. “For most acquisition and financing closed on Dec. 23 Related is developing several large res- of 2014, issuance levels lagged behind most and hit city records this week. idential and commercial towers in Hud- experts’ opinions. A surge in the second half Crain’s New York Business first son Yards, the largest private construction of the year helped the market reach almost reported the news of the sale in May, cit- project in the country. $100 billion in deals, leading many lenders ing sources that say Related will erect a Representatives for Related and Deutsche to predict that issuance will crack that bar- 250-foot residential tower on the sites. Bank could not immediately be reached for rier in 2015.” The completed building will sit adja- comment. —Damian Ghigliotty cent to the Frank Gehry-designed IAC —Damian Ghigliotty

3 | january 9, 2015 ONE FIRM. DELIVERING CUTTING EDGE FINANCIAL STRUCTURING

$186,000,000 $90,000,000 $32,300,000 Construction Loan Acquisition Finance JV Equity 372 Units 488 Keys 342 Units Multifamily Hotel Multifamily New York, NY Burbank, CA Larkspur, CA

$22,862,500 $11,250,000 $11,100,000 Acquisition Finance Refinance Acquisition & Renovation 697,000 sf 158,000 sf 12,000 sf Retail Retail Townhouse Tampa, FL Westminster, CO New York, NY

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4 | january 9, 2015 Hotel REIT Takes $150M Unsecured Greystone Further Term Loan Facility Publicly traded REIT RLJ Lodging refi- Expands Freddie nanced outstanding CMBS debt to the tune of $150 million, the firm announced yesterday. The new unsecured term loan facility allows Mac Loan Offering RLJ to resolve any questions about refinanc- ing next year, when interest rates will likely be Multifamily and health care “We could not be more thrilled higher and a slew of loans will be due, poten- lender and developer Greystone to add the Freddie Mac Program tially stretching lenders’ limits—the antici- has earned Program Plus status Plus status to our stable of multi- pated so-called “wall of maturities.” from Freddie Mac family loan offerings,” Joe Mos- “With the completion of this transaction, MOW Multifamily, allow- ley, executive managing director we will address all of our 2015 debt maturi- EXCLUSIVE ing the firm to offer of Freddie Mac and Fannie Mae ties,” Thomas Baltimore Jr., president and loans of all sizes for lending at Greystone, said in a CEO of the firm, said in a statement. “Our abil- multifamily properties in New written statement. “Adding to our ity to secure a seven-year term loan reaffirms York, New Jersey and Connecti- existing agency lending offerings, the confidence that our financial partners cut, Mortgage Observer Weekly we are pleased we can now offer have in the company. Furthermore, our bal- has first learned. a full spectrum of complete GSE ance sheet is in an excellent position to pursue The new designation comes on financing products for multifamily additional growth opportunities.” the heels of Greystone closing the property owners and acquirers.” The loan, which was jointly arranged by first loans under the GSE’s new Executive Vice President of Capital One and PNC Real Estate, has a small-balance securitized loan Freddie Mac Multifamily David floating interest rate of Libor plus 180 to 260 platform, as MOW reported last Brickman said Greystone’s “rep- basis points, according to the statement. month. utation for identifying qualified The loan will not fund immediately, but will The New York-based lender borrowers and delivering expert instead become available next year when the and developer has been providing execution” of its multifamily loan pre-payment windows for the current CMBS financing for affordable housing products assures the agency lender loans open. The loan should be fully drawn by through Freddie Mac Multifam- that Greystone “will serve as a long- the second quarter of 2015. The loan also has ily since 2011, according to the lasting partner for years to come.” an option for the borrower to take an addi- two companies. —Damian Ghigliotty tional $100 million, the statement said. RLJ Lodging owns 144 hotels in 21 states. The next tranche of debt the REIT holds will not mature until 2017. —Guelda Voien

Herrick Feinstein added two part- will focus on originating market-rate ners in the real estate department, Workforce and affordable multifamily loans and according to a statement from the health care loans, out of the Denver, firm. Efram Friedman and Chris- Colo., office, a statement from the tina Ying joined the 50-attorney firm. Policy and Community Development firm said. for the city of New Orleans. Prior to joining Walker & Dun- Brian Lawlor joined law firm lop, Mr. Lowen served as principal Jones Walker’s affordable housing Walker & Dunlop announced that of FHA Loan Originations at Pru- team as special counsel in the New it has hired Ralph Lowen and Scott dential Mortgage Capital Com- York and New Orleans offices, the firm Becker to join its FHA Finance pany. Mr. Becker previously served announced. Mr. Lawlor previously group. Mr. Lowen, senior vice presi- as an account manager at Prudential served as the Director of Housing dent, and Mr. Becker, vice president, Huntoon Paige Associates, LLC.

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6 | january 9, 2015 Q+A

321 West 44th Street, Ed Lombardo New York, NY 10036 212.755.2400 Head of Placements and Underwriting Guelda Voien at Eastern Union Funding Editor Mortgage Observer Weekly: You Damian Ghigliotty focus on construction. What is the Senior Reporter construction lending climate like right now? Cole Hill Ed Lombardo: The construc- Copy Editor tion loan climate is quite support- ive of development, and construction costs are increasing faster than infla- Barbara Ginsburg Shapiro tion. The nation is benefiting from an Associate Publisher increase in private construction, and banks are increasing the amount of Miguel Romero construction loans at a greater rate Art Director than other type of commercial real Lisa Medchill estate loans. Underwriting is becom- Advertising and Production Manager ing more favorable to the borrower, since construction debt remains inex- pensive and abundant, and the loans OBSERVER MEDIA GROUP are performing well. Ed Lombardo Jared Kushner What type of borrowers do you Publisher target? light manufacturing buildings to be con- We target borrowers whose develop- verted; the city realized they would not be Joseph Meyer CEO ment team backs the project they wanted utilized by light industrial firms again. Before financed. If someone is building a six- 2005 we had a decade’s worth of long decline Michael Albanese story, 50-unit apartment building, the in manufacturing and the need for these President banks want to see similar assets in that buildings. Pressure was building up to legally borrower’s arsenal. In addition to the convert these buildings into residential use. Ken Kurson basic criteria including permits and build- Most renovations have been completed and Editorial Director ing approvals, there are two fundamen- this deal reflects an end of an era as one of the Robyn Reiss tal musts lenders must see in a borrower: last remaining projects of its kind. Vice President of Sales comparable experience and liquidity. Ten percent to 15 percent of the total project I know you are also well versed in bank- Thomas D’Agostino costs must be in liquid assets. Also very ing regulation, as it relates to commercial Controller critical: a strong development team. One lending. Any concerns going into 2015? Laurence Rabinowitz of the issues I explore in a proposal is how Dodd-Frank greatly concerns me. We had General Counsel strong the development team is, but I’m historic changes to banking rules after 2008, also looking for a realistic trajectory. If including a tremendous amount of legis- For editorial comments or to submit a someone has been successful with two or lation, yet we don’t have most of the rules tip, please email Damian Ghigliotty at three family homes, then the next project to implement them. Without the rules, the [email protected]. would be six units, if growth is an objec- reforms have proved to be a laborious pub- tive. You can have a progression in deal lic policy experience. Banks with under a For advertising, contact Barbara size, but it is a judgment call and you can’t billion in assets are having challenges keep- Ginsburg Shapiro at bshapiro@observer. climb the scale too quickly. ing up with compliance costs. Chase, as an com example, is hiring thousands of people for or call 212-407-9383. Can you tell me about an interest- regulation-related ends, and smaller banks ing deal you’ve worked on recently? are getting squeezed. For general questions and concerns, Eastern Union Funding is represent- The new spending bill might present a sil- contact Guelda Voien at gvoien@ ing an owner of a loft building used by a ver lining, however. On the residential side observer.com Williamsburg manufacturing firm that is we’re seeing a weakening in the ideas of or call 212-407-9313. being renovated into housing. This deal what qualifies for a mortgage, and the banks captures the transaction from light man- are loosening up on their underwriting of To receive a trial subscription to ufacturing to residential loft housing, commercial real estate. However, without Mortgage Observer Weekly, please call which allowed Williamsburg to revital- written rules we don’t know what lenders 212-407-9371. ize. Re-zoning in 2005 allowed all these are going to say on a given deal.

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8 | january 9, 2015