Cash Drop: Power 50s Who Dumped the Largest Bags of Cash in Major US Cities in 2018
Here’s where some of the largest debt deals were done across the country last year by Power 50 list honorees.
New York: All Signs Point West
Blackstone’s $1.8 billion construction loan on Tishman Speyer’s The Spiral at 66 Hudson Boulevard was one of 2018’s most impressive New York debt deals.
In April 2018, Blackstone Mortgage Trust supplied the single-sourced loan for this incredibly innovative Hudson Yards project, a planned 65-story, 2.5-million-square-foot development designed by Bjarke Ingels Group.
Another standout was Moinian Group and Boston Properties’ $2.2 billion debt and equity deal to start construction on the planned 2-million-square-foot office tower at 3 Hudson Boulevard. The deal, which was arranged by JLL’s Aaron Appel and Kellogg Gaines, included a roughly $500 million equity investment from Boston Properties, which will develop the property for a 25 percent stake in the project, expected to finish in 2023.
Los Angeles: Ain’t Life Grand?
One of the largest debt deals in the City of Angels in 2018 closed in November, when Deutsche Bank lent $630 million to Related Companies for construction of The Grand, the firm’s planned $1 billion, Frank Gehry-designed mixed-use development at 100 South Grand Avenue in Downtown Los Angeles.
Related teamed up with Core USA—a joint venture between China Harbour Engineering Company and CCCG Overseas Real Estate, the latter which invested $290 million in the project in December 2016.
The Grand, which will stand 39 stories and comprise retail, hotel, dining, entertainment and residential space, sits across the street from the Gehry-designed Walt Disney Concert Hall.
Away from L.A.’s Downtown, the former home of the Westside Pavilion shopping mall at 10800 Pico Boulevard is being redeveloped by Hudson Pacific Properties in partnership with mall owner and operator Macerich into One Westside, a 600,000-square-foot creative office building that will be home to Google. The tech giant signed a 14-year lease to occupy 584,000 square feet of the over 600,000-square-foot complex upon its completion in 2022. The owner’s project the redevelopment will cost around $450 million.
One Los Angeles-based lender who spoke to CO said One Westside is by far “the sexiest deal out there…it checks all the high-profile boxes—size, sponsors, Google and big redevelopment.”
Washington, D.C.: State of the Union
In D.C. in May 2018, Citibank and Natixis provided $330 million in senior debt and Kookmin Bank Co. added a $100 million mezzanine piece to refinance previous debt on billionaire developer Ben Ashkenazy’s Union Station mixed-use development.
The $330 million senior portion of the loan was securitized in the US 2018-USDC CMBS transaction in June.
Constructed in 1908, Union Station—at 40-50 Massachusetts Avenue—has 200,550 square feet for retail, 135,652 square feet for offices, 20,825 square feet of event space and 63,770 square feet for train platforms and passenger waiting space that Amtrak utilizes.
Also on the year, in September, Mack Real Estate Credit Strategies provided a $380 million construction loan for Penzance’s The Highlands, a 1.2-million-square-foot mixed-use development in Rosslyn, Va., which was planned ahead of Amazon’s announcement of its HQ2 in nearby Crystal City.
Chicago: Where There’s a Willis There’s a Way
In the Windy City, Barclays’ $1.33 billion refinance of Blackstone’s 110-story, 4.5-million-square-foot Willis Tower—the largest single-property standalone CMBS transaction in 2018—holds the crown.
The floating-rate deal was securitized in the BBCMS 2018-TALL transaction. Willis Tower was built in 1973 and renovated last year.
In May, Bank of America and J.P. Morgan Chase combined to provide a $495 million construction loan—and USAA Real Estate added another $169.6 million—for the construction of Howard Hughes Corp. and Riverside Investment & Development’s 110 North Wacker Drive, a planned 53-story tower in Chicago.
But wait, stop! There’s more. Just last month, Bank OZK made a $475 million construction loan and Square Mile Capital Management provided a $260 million equity and mezzanine debt financing package for JDL Development and Wanxiang America Real Estate Group’s $850 million One Chicago Square development.
Miami: How Aventura-ous!
In Miami, J.P. Morgan Chase led a banking quartet that consisted of Deutsche Bank, Morgan Stanley and Wells Fargo to fund a $1.75 billion package on the 2.2-million-square-foot Aventura Mall at 19501 Biscayne Boulevard. J.P. Morgan funded 34 percent of the loan, and each of the other three banks funded 22 percent.
The 10-year, CMBS loan—arranged by Eastdil Secured—went to Turnberry Associates and Simon Property Group.
A $750 million portion of the loan was securitized into a single-asset, single-borrower CMBS deal, called Aventura Mall Trust 2018-AVM and issued by J.P. Morgan. The remainder of the $1.75 billion loan is slated for future CMBS securitization.
National: Blackstone Bucks
In October, Bank of America and Citi Real Estate Funding paired up to provide $3 billion in debt to Blackstone against a portfolio of 171 industrial properties, totaling 46.4 million square feet, across 22 states. One hundred twenty-nine of the buildings are warehouses leased to tenants like Amazon, FedEx and Clorox. The deal marked one of the largest commercial real estate loans of 2018, nationwide.
The senior portion of the financing, $2.5 billion in CMBS debt, was securitized in the BX 2018-IND transaction, and as part of the deal, the lenders will extend $500 million in mezzanine credit outside of the CMBS trust. The mezzanine debt was further split into senior and junior tranches of $300 million and $200 million, respectively.