Metro Loft Nearing $335M Recap of 180 Water Street

Nathan Berman’s Metro Loft is closing in on a roughly $335 million recap of 180 Water Street, a former office building converted to residential, Commercial Observer has learned. 

Kevin Chisholm’s 60 Guilders and Sentry Realty — led by Alen Mamrout and Joe Mamrout — are coming into the deal as new equity partners as part of the recap, purchasing a roughly 50 percent interest, sources said. Additionally, new debt will also be placed on the building. 

The deal, which values the building at $335 million, is scheduled to close within 45 days, sources said. 

Newmark’s Adam Spies, Adam Doneger and Michael Collins are leading the recap, while Newmark’s Jordan Roeschlaub and Chris Kramer are currently in the market arranging the debt. 

Newmark and 60 Guilders declined to comment. Sentry and Metro Loft did not immediately respond to requests for comment.

The 460,000-square-foot 180 Water was built in 1971 as a 24-story office tower. Vanbarton Group bought the property for $151 million in 2013 and Metro Loft bought an “around 10 percent” stake in the property in 2014, as CO previously reported. 

It was converted to 573 residential units in 2017 and Metro Loft acquired full control of the property that year, paying Vanbarton $450 million.

In December, the property created headlines when its $265 million commercial mortgage-backed securities loan — plus an additional $100 million mezzanine loan held outside of the trust — that Metro Loft secured from Deutsche Bank in 2019 failed to pay off at maturity in November. 

By April, the CMBS loan’s special servicer, CW Capital Asset Management, had filed a pre-foreclosure action against Metro Loft, PincusCo reported. 

Berman previously told CO that even though 180 Water had high occupancy rates and commanded strong rent prices, the rising interest rates were the reason its loan fell into distress.

“When you borrowed money five years ago at 3 percent and now need to pay 6.25 or 6.5 percent in interest to refinance, what do you think is happening to that building?” Berman previously said. “And it has nothing to do with the performance of the building itself. These buildings can’t sustain mortgages that have doubled, or more than doubled, interest payments. If you are highly leveraged and you double interest rates, you’ll be in trouble.”

With the recap now underway, the pre-foreclosure motion will be put to bed, sources said. But Berman’s still dealing with issues at the converted 20 Broad Street, which had its $250 million CMBS loan hit special servicing in August.

Cathy Cunningham can be reached at ccunningham@commercialobserver.com. Nicholas Rizzi can be reached at nrizzi@commercialobserver.com.