The Insider’s Weekly Guide to the Commercial Mortgage Industry In This Issue 1 Silverstein Refinances River Place with $230M from Wells Fargo 1 Rubin Schron Nabs $100M for Purchase of Rachel Gardens 3 Wells Fargo Finances Florida Office Acquisitions 5 Williamsburg Rental, Seven Years Stalled, Scores $21M Take-out Loan 6 Prodigy Network Again Proves Crowdfunding Works for Hotel Developments 8 J.P. Morgan Asset Management Receives $70M to Buy Hoboken Property “I figured out long ago that if I tried to emulate, say a Cravath,“Ugait, cor Swaine in henim & Moore, dit eumbut be ent better euguer than in verate.them in theirUgait, core cor areas, in henim that vullamwas anulput sure road prat, to sis Silverstein Properties uneventfuldit eum extinction. ent” ” —Bruce—Name Stachenfeld Here Refinances River Place with From NameFrom Q&Aof article on page on page 11 X $230M from Wells Fargo Wells Fargo provided a $230 million through the acquisition, and maintained Fannie Mae loan to Silverstein Properties a relationship with Silverstein Properties Rubin Schron Nabs to refinance its River Place rental tower over the years. at 650 West 42nd Street on the corner Larry Silverstein’s development, in- $100M for Purchase of 12th Avenue, the borrower confirmed to vestment and management firm built the Mortgage Observer Weekly. 41-story, 921-unit rental property at 650 of Controversial The seven-year interest-only loan carries West 42nd Street, along the Hudson River, a rate below 3.5 percent and replaces exist- in 2000. Mr. Silverstein acquired the land, Rachel Gardens ing securitized debt on the property that which also now houses luxury rental build- is nearing maturity, Silverstein Properties ing Silver Towers, for $20 million in 1984 Meridian Capital Group brokered Chief Executive Officer Marty Burger said. with a $25 million loan from Bankers Trust a $100 million acquisition loan for New Ackman Ziff served as a broker on Company. York investor Rubin Schron to purchase the transaction. Starting rents at River Place the hotly disputed Rachel The Fannie Mae loan replaces a run $2,690 for a studio apartment, MOW Gardens Montville luxury The EXCLUSIVE $200 million 10-year CMBS loan $3,390 for a two-bedroom unit and apartment community in Pine originated by American Property LEAD $4,990 for a three-bedroom unit. Brook, N.J., Mortgage Observer Financing in January 2005, which The tower, which is 99 percent Weekly has exclusively learned. had a fixed interest rate of 5.3 per- leased according to a Silverstein Mr. Schron’s Cammeby’s International cent. Wachovia, now Wells Fargo, Properties spokesperson, contains Group snagged the complext from the Wilf acquired APF in 2006. a courtyard, roof deck, gym, and a glass-en- family and partners, after years of legal Alan Wiener, group head of Wells Fargo closed 25-yard pool—one of the largest in a wrangling among those owners. Multifamily Capital and former chief execu- New York City residential building. tive officer of APF, came over to Wells Fargo —Damian Ghigliotty See Schron... continued on page 3 1 | SEPTEMBER 5, 2014 Meridian Capital Group Proudly Arranged Financing for the Following Transaction: $70,000,000 Floating-Rate Acquisition Financing Fee Position of Mixed-Use Collateral 40-Day Closing Chelsea, New York, NY Drew Anderman, Senior Managing Director, Alan Blank, Senior Vice President, and David Bollag, Associate, ULNV[PH[LK[OLÄUHUJPUNMVY[OPZ[YHUZHJ[PVU 1 Battery Park Plaza New York, NY 10004 | 212 972 3600 | www.meridiancapital.com MOW - $70MM - D. Anderman A. Blank D. Bollag - 9-5-14.indd 1 2 | SEPTEMBER 5, 2014 9/3/14 9:40 AM Schron...continued from page 1 Zygmunt Wilf, owner of the Minnesota Vikings and a pillar of New Jersey real es- tate, was accused of cheating his partners, Ada Reichmann and her brother Josef Halpern, out of proceeds from the project, which was completed in 1999. An appeals court sided with the Wilf family, before a Superior Court judge last summer revered course and ordered the complex sold at auc- tion and the monies split among the quar- reling parties. Rachel Gardens holds 32 three-story buildings, which have 764 units total. Cammeby’s paid $136 million, The New York Times reported at the time. Flagler Station The 12-year Fannie Mae loan for the pur- chase was provided through Capital One, has a sub-4 percent interest rate and inter- est-only payments for the first six years, and Wells Fargo Finances a 30-year amortization schedule after that, according to a representative for Meridian. The building’s amenities include pati- Florida Office Acquisitions os, washer/dryer and dishwashers in each apartment and common tennis court, Wells Fargo provided $80 million $29.7 million balance sheet loan for the swimming pool and barbecue area. in financing to a fund managed by New acquisition of Doral Concourse, at Meridian Senior Managing Director Abe York-based real estate investment firm 8400 NW 36th Street in Doral, Fla., Hirsch, Managing Director Zev Karpel DRA Advisors LLC for according to a Wells Fargo spokesper- and Vice President Akiva Friend arranged MOW the acquisition of two of- son. Both loans carry five-year terms. the loan for the complex, located at 67 EXCLUSIVE fice properties in Florida, DRA acquired the properties from Chapin Road. Mortgage Observer Flagler Development, a subsidiary of “This was an example of the kind of re- Weekly has exclusively learned. Fortress Investment Group, for $132 sults that are possible when you bring The San Francisco-based bank orig- million last month, according to previ- knowledgeable parties to the table,” Grace inated a $50.3 million balance sheet ous news reports. Huebscher, president of Capital One loan for the acquisition of office space DRA did not respond to a request for Multifamily Finance, said in a statement at Flagler Station, at 10505 NW comment. provided exclusively to MOW. “Our agen- 112th Avenue in Miami, as well as a —Damian Ghigliotty cy financing team, Fannie Mae, Meridian, and the sponsor worked seamlessly togeth- er, and I believe all are pleased with the out- come of this transaction.” Mr. Schron made headlines for his failed $2 billion bid to buy the Empire State Building last year. Fresh off the Presses! No phone number for Cammeby’s was If you haven’t already, the market may be overheat- check out Mortgage listed. SEPTEMBER 2014 | $10 ed, and a possible near-term —Guelda Voien Observer’s annual Lawyers’ slowdown in New York is defi- Issue, which is available nitely on his clients’ minds. this week. In it, you’ll find a Mortgage Observer’s new compendium of timely legal columnist, former congress- information, including cau- man and Jones Walker tionary tales for today’s mez- Partner Rick Lazio, took an zanine borrowers, stories in-depth look at the federal of when bad-boy guaratees Lawyers’ Issue government’s possibly chang- FROM EB�� FINANCE TO FRAUGHT FORECLOSURES, THE COMMERCIAL MORTGAGE INDUSTRY'S TOP bite borrowers back and a LEGAL MINDS TELL US WHEN TO BE WARY ing role in guaranteeing ter- detailed look at the many DO MORTGAGE REITS STAND Q&A: RICK LAZIO ON WHY TRIA rorism insurance—policies TO BENEFIT FROM THE FED'S BAKER HOSTETLER'S NEEDS TO BE RENEWED harbingers of deteriorat- BELT�TIGHTENING? DENNIS RUSSO IN NEW YORK that are required for large ing underwriting for CMBS commercial properties, espe- loans. cially in New York City. You’ll also find a candid Q&A with Dennis Lastly, we checked in with the nation’s Russo, the head of real estate practice at largest commercial mortgage REITs, whose New York firmBakerHostetler , who recent- earnings calls reveal that they may benefit ly took over there and intends to immediate- from the expected climb in interest rates ... as ly bulk up the firm’s real estate presence. He long as they don’t rise too fast or too far. tells us about getting his start at a white shoe If you need a subscription to our monthly firm as the son of a fireman from Queens as Rachel Gardens glossy, email [email protected]. well as what many in the industry confirm: —Guelda Voien 3 | SEPTEMBER 5, 2014 Delivering on the Assignment CAPITAL PARTNERS LLC T H . K S Sampling of 2014 Closed Transactions $66,000,000 $50,000,000 $25,500,000 Permanent financing of a Permanent financing for Construction financing for a multi-family property one commercial property 77,000 Square Foot comprised of 416 unit and one mixed-use property multi-family rental building • Elmsford, NY • • SoHo, NY • • New York, NY • $17,200,000 $11,550,000 $20,600,000 Permanent financing Acquisition financing Construction financing for a of an 80-unit of two mixed multi-family property multi-family building use properties comprised of 165 unit • Riverdale, Bronx • • Harlem, NY • • Fairfield, CT • • Debt • Equity • Mezzanine • Construction • Bridge • Private • Joint Ventures 127 West 24th Street, 2nd Floor, NY 10011 • (212) 254 1600 • www.hks.com 4 | SEPTEMBER 5, 2014 Williamsburg Rental, Seven Years Recently Financed Transactions Stalled, Scores $21M Take-out Loan A once-stalled Williamsburg rental proj- ect that made an auspicious turn-around last year has received a $21 million take-out loan—a capstone on a success- Your Source for MOW ful project, as a developer can EXCLUSIVE free up cash and lock in a lower interest rate than on their con- Capital Markets Solutions struction loan. Eastern Union Funding bro- kered the new loan with Investors Bank. The eight-story, 42-unit residential build- ing, at 210 North 12th Street, had been un- FINANCED:FINANCED 2/27/2014 FINANCED:FINANCED 2/28/2014 derway since 2007, but construction didn’t actually begin until summer of 2013.