Mortgage Observer

Mortgage Observer

Defeasance Back in Style

A Shopko retail store.

Defeasance provisions, which allow sponsors to swap out a loan with treasury securities that replicate the cash flows of the loan, have again become a popular option for CMBS borrowers looking to lock in rates and avoid prepayment penalties, industry sources told Mortgage Observer.

While defeasance provisions were invoked regularly before the 2008 financial meltdown, the current wave marks a new post-crisis high. Read More

Mortgage Observer

Q&A: Mark McCool, President of Berkadia Commercial Real Estate Services

Mark McCool.

Mr. McCool leads the servicing division of Berkadia Commercial Real Estate Services, a company owned by Berkshire Hathaway and Leucadia National Corp with 75 offices nationally. The company services a portfolio of properties in the U.S., Canada and Mexico valued at over $245.3 billion and is the third-largest multifamily servicer nationally. Mr. McCool recently sat down with Mortgage Observer in Berkadia’s Midtown Manhattan office, where he told us about the future of Fannie Mae and Freddie Mac, the market for debt on distressed properties and the company’s operations in Hyderabad, India. Read More

Mortgage Observer

Goldman Sachs, Triangle Equities Win Award For Creative Financing of Bronx Mixed-Use Project

Rendering of Triangle Plaza Hub.

After years of work wrangling would-be tenants and buyers and navigating the murky waters of city and state tax credits, Triangle Equities has emerged with a viable strategy for its Triangle Plaza Hub, a mixed-use development in the South Bronx. So viable is the arrangement the developer finally finagled, with the help of Goldman Sachs Urban Investments unit, that it even won an award for its use of tax credits.  Read More

Mortgage Observer

Wells Fargo and BNY Mellon Lead $412M Loan for Durst West Side Rental

A rendering of 625 West 57th Street. (Durst Fetner)

The Durst Organization scored a $411.5 million construction loan from a group of lenders led by Wells Fargo and Bank of New York Mellon Corp. to finance the development of its tetrahedron-shaped rental tower at 625 West 57th Street, sources familiar with the deal told Mortgage Observer.

The loan, which closed last week, carries a term of four years with a one-year extension option and “smoking interest rates,” one person familiar with the transaction said on the condition of anonymity. Read More

Mortgage Observer

Zeckendorfs Lock Down $450M For 520 Park Avenue

A rendering of 520 Park Avenue

Remember that $130 million penthouse? The record-breaking listing made waves after developer Arthur Zeckendorf revealed the nine-figure asking price for the triplex penthouse at his 520 Park Avenue to Bloomberg News this September.

Now, Mr. Zeckendorf, who with his brother William forms the development team behind much of the city’s fanciest—and most elegant—housing, is one step closer to making some Russian oligarch’s dreams of cash stashery come true. The Zeckendorfs closed on a $450 million construction loan to build the 31-unit Park Avenue condominium tower earlier this month, a source close to the deal told Mortgage Observer. The mortgage has not yet hit city records. Read More

Mortgage Observer

Brokers and Lenders on the Rise

25 Photos

25 under 35 MO26

What is an industry without a promising crop of rising stars? While commercial real estate lending is often cast as a rigid establishment of older gentlemen, a number of dynamic young brokers are making their name across the East Coast—and giving their more senior counterparts a run for their money. Read More

Mortgage Observer

Chasing the Dream: Chad Tredway Tackles the Middle Market

Chad Tredway of Chase CTL East (Francesco Sapienza)

This spring, Chad Tredway became the youngest senior manager among J.P. Morgan Chase & Co.’s commercial real estate lenders as well as the youngest managing director at the commercial bank.

While tasked with building multifamily business for the country’s largest bank, with $2.5 trillion in assets, Mr. Tredway came into this position without family connections or Ivy League bragging rights. Read More

Mortgage Observer

Williamsburg Rental Project, 10 Years in the Making, Gets Takeout Loan

64 Bayard Street

Witold Brend of Brend Development Corporation, the owner of a 53-unit Williamsburg luxury rental development, has secured a $26.5 million permanent take-out loan against the newly minted building, Mortgage Observer has exclusively learned. 64 Bayard Street, which sits just off McCarren Park, hit the market last December.

The 53 units, which include six penthouses, are fully occupied, said a source close to the deal. Read More

Mortgage Observer

Commercial Loan Originations Continued to Climb in the Third Quarter

Commercial Loan Originations 2004-2014 (Mortgage Bankers Association)

Commercial real estate loan originations in the third quarter were up 16 percent from the same period last year and up 18 percent from the second quarter of 2014, the Mortgage Bankers Association reported today.

That included a 41 percent year-over-year increase in the dollar volume of multifamily loans, as well as a 22 percent increase for industrial loans, an 11 percent increase for office loans, an 11 percent increase for retail loans and a four percent increase for hotel loans.  Read More

Mortgage Observer

Ytech Cashes Out With Rialto

Crystal Lakes Apartments - Meridian Capital Group 2

Meridian Capital Group arranged a cash-out refinance for the Crystal Lakes Apartments in suburban Miami, Mortgage Observer has exclusively learned. The $25.5 million CMBS loan came from Rialto Capital Management, said a source close to the deal.

The 491-unit multifamily property, located in Miami Gardens, Fla., is owned by Miami-based multifamily landlord Ytech InternationalRead More

Mortgage Observer

Risk Retention Rules Approved, Will Increase Cost of CMBS Transactions

Send in the clowns...

Six federal agencies voted this week to approve new risk retention rules that could foul up the finally recovered CMBS issuance pipeline, even though the new rules won’t be enacted until 2016. However, the sentiment from some industry observers was relief—earlier proposed regulations were even more strict.

As part of the Dodd-Frank Act’s implementation, rules were passed last month that require managers of collateralized loan obligations, including CMBS, to hold a larger portion of deals on their books—a move that is expected to increase costs but one that won’t scare away investors, according to industry sources. Read More

Mortgage Observer

Cayuga Capital Crowdfunds Part of $7M Bushwick Buy

294 Harman Street.

Developer Cayuga Capital Management has paid $7 million for the acquisition and planned renovation of a series of Bushwick, Brooklyn multifamily properties in part through crowdfunding, Commercial Observer has learned.

Two days ago, Cayuga Capital closed on the $6 million acquisition of four buildings at 290 and 294 Harman Street from two private individuals. Fundrise raised $1.4 million toward the project cost for Cayuga Capital through investments ranging from $5,000 to $500,000 from 33 people around the country, according to Dan Miller, the co-founder and president of Fundrise. Read More

Mortgage Observer

Santander Finances GDC Long Island City Industrial Buys

11-24 45th Road.

Santander Bank provided a $22 million loan to Hawthorne, N.Y.-based GDC Properties to facilitate the acquisition of two Long Island City industrial properties ripe for redevelopment, city records show.

The retail and residential developer acquired a one-story warehouse at 11-24 45th Road from a seller listed as Eunhasu Corporation for $37 million and a factory at 45-35 11th Street for $7 million from a seller listed as Kyu Heung Park. Read More

Mortgage Observer

Emerald Creek Lends $23M For LES Condo Project

50 Clinton Street

New York-based private equity firm Emerald Creek Capital provided a $23 million acquisition/ bridge loan for the purchase of a development site on the Lower East Side.

Sponsor DHA Capital intends to build a mixed-use project at the site, located at 50 Clinton Street. The building will hold seven-stories of residential condominiums as well as retail, a gym and roof deck for residents.  Read More

Mortgage Observer

Houston Office Loan Goes to Servicer Watchlist as Vacancies Mount

Park Towers in Houston.

A $96.7 million CMBS loan on a four-office portfolio in Houston was added to Midland Loan Services’ watchlist this month as tenant vacancies at the properties continue to stack up, according to a report issued today by the financial research firm Trepp.

Three tenants occupying more than a third of the portfolio, which includes the 18-story office buildings Park Towers South and Park Towers North, have relocated or will vacate the properties before November, servicer notes obtained by Trepp show. Read More