“On the lending side, though rates may rise How Can Fortress ...

[Pages:11]The Insider's Weekly Guide to the Commercial Mortgage Industry

In This Issue

1 How Can Fortress Finance $4.7B Stuy Town Buy?

1 Baltimore Investor Refis With $40M From Investors Bank

3 ICSC's Biggest Bones To Pick

4 JLL Brokers $35M Refi for D.C. Office Rehab

5 Arbor Lends $30M on Pennsylvania Multifamily Development

5 Built-to-Suit Warehouse in New Jersey Scores $27M Construction Loan

5 LIC Warehouse Nabs $14M to Convert to Office

How Can Fortress Finance $4.7B Stuy Town Buy?

"On the lending side, though rates may rise and fall, there is always a need for quick access to

capital. "

--Eric Roth From Q&A on page 11

On the heels of a report that Fortress by a group of insurance companies or similar

Investment Group LLC is close to buying institutions like pension funds or, more like-

Stuyvesant Town-Peter Cooper Village ly, by conduit lenders who then packaged the

for about $4.7 billion, commercial real estate senior debt into CMBS, probably as a single-

finance specialists are wondering how the asset CMBS deal," said Mr. Thypin.

suitor can finance the deal. After all, the last

But there are complications with these

time the behemoth housing complex was options, said Matt Gilligan, the executive

sold, things didn't go so well.

vice president and group head of CIT Real

Fortress is reportedly looking to bring in Estate Finance.

equity partners in the planned pur-

The CMBS market, would see

chase, which Bloomberg News first reported on Wednesday. Stuyvesant

The

"too high of a concentration in a particular financing," in such a circum-

LEAD Town, which occupies 80 acres and

holds 11,231 apartments in 110 build-

stance, Mr. Galligan said. One alternative avenue is the

ings, is the largest rental complex in

pension market, which could target

Manhattan.

mezzanine debt.

To foot the $4.7 billion bill, equity

"It has a lot of cash to put into

partners alone may not be enough, sources play, they are very savvy in real estate mar-

told Mortgage Observer Weekly. One pos- kets, and they would put very large dollars

sibility is for Fortress to use a combination to work," Mr. Gilligan said of the pension

of equity, senior debt and mezzanine debt, market.

plus any credit it receives for holding exist-

Situated on the border of the East Village

ing debt, which can be converted to equity and Gramercy neighborhoods, Stuyvesant

in the event of a sale, said Ben Thypin, the Town-Peter Cooper Village is an under-

director of market analysis at Real Capital standably appealing asset but has turned out

Analytics.

"The senior debt could either be funded

See How Can Fortress.. continued on page 3

1 | May 16, 2014

Baltimore Investor Refis Recent Multifamily Buy With $40M From Investors Bank

Blue Ocean Realty, a Baltimore-based commercial real estate investment and management firm, has secured a $40 million loan from Customers Bank to refinance its recent acquisition of the Millbrook Apartments in Baltimore.

The 40-acre Millbrook property has 73 buildings and 721 rental units. Blue Ocean purchased the Millbrook Apartments for $47 million in January, sources said.

Meir Kessner and Ira Zlotowitz of Eastern Union Funding brokered the loan.

See Baltimore Investor... continued on page 3

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