Al Barbarino

The Moinian Group has secured a $539m loan for its 1.16 million-square-foot luxury residential rental tower under construction at 605 West 42nd Street in Manhattan, on the northwest corner of 11th Avenue. The loan was provided by the New York State Housing Finance Agency. Bank of China and life insurance company Ullico also played a role in […]

New York City-based investment and advisory firm Talmage has completed the $100m first closing of Talmage Total Return Partners, a new high-yield real estate debt fund. The fund is targeting $300m in total investor commitments and will make opportunistic commercial real estate debt investments, including CMBS, whole loans, B-Notes, and mezzanine loans. The capital commitment comes […]

TIAA-CREF has provided a $175m fixed-rate loan to Clarion Partners’ Lion Industrial Trust Fund. The 10-year loan will be used to retire the existing debt on a seven-property, five-million-square-foot industrial portfolio that includes two assets in San Bernardino, California; four in Dallas, Texas; and one in Southaven, Mississippi. Constructed between 2001 and 2005, the portfolio […]

Kroll Bond Rating Agency has issued a pre-sale report on Blackstone’s third securitisation of single family rental homes, noting that the $720m Invitation Homes 2014-SFR2 has the highest LTV of any of the five previous SFR transactions. Kroll assigned the $322.6m top tranche a “AAA” rating (see chart for full ratings), in addition stating that based on the portfolio’s aggregate brokers' valuation the securitisation has a 79% LTV – higher than the previous 65% to 75% range among five previous SFR deals. The LTV based on KBRA’s stressed valuations is 85.3%, well above the previous 72.1% to 81.9% range and 79% average. “Higher leverage generally implies less borrower equity, greater likelihood of default, and higher overall loss severity in the event of a default,” according to the report. Blackstone included Class G certificates as a risk retention class (by increasing the overall size of the loan with an interest-free component) in order to comply with European Banking Authority regulations, requiring the sponsor to retain 5% of economic interest in the capital structure. But “while risk retention can be viewed as a credit positive, KBRA does not believe it mitigates the impact of increased leverage, as the entire loan proceeds will need to be refinanced at maturity,” Kroll said. Nitin Bhasin, a Kroll managing director on the team that prepared the report, said the stresses applied to the securitisation -- 95% default stresses and 50% home decline stresses at the AAA level -- account for the increased leverage. "It's very common to have different LTVs based on borrower preference," he said. "Our models are built so that every particular nuance or change in metrics is taken into account." Though a number of metrics beyond LTV would be taken into account, Bhasin didn't rule out the possibility that significant further upticks in LTVs on subsequent SFR securitisations could lead Kroll to not rate the securities. In this case, he noted that Kroll did not rate Class G. The Kroll report was issued just days after Jonathan Gray, Blackstone’s global head of real estate, reportedly said at a New Jersey State Investment Council meeting that Blackstone plans to exit the business through an IPO in the coming years. The company had alluded to this in the past. Invitation Homes 2014-SFR2 marks Blackstone’s third SFR securitization, the most recent being May’s $993m Invitation Homes 2014-SFR1, which is the largest SFR deal to date. There have been six total SFR securitizations so far including Invitation Homes 201-SFR2, between Blackstone, American Homes 4 Rent and Colony American Homes, with a number of additional SFR owners looking to enter the market soon. Major institutional buyers spent as much as $25bn plucking some 200,000 properties out of foreclosure since the recession. Blackstone began buying when home values were down between 35% and 40%, acquiring more than 40,000 properties in markets that were well positioned for a strong recovery, the company has said. Deutsche Bank may reportedly start marketing 2014-SFR2 to investors this month.

Los Angeles-based alternative investment firm Thorofare Capital has raised $200m for Thorofare Asset Based Lending Fund III in less than eight months. The firm said it has another $50m “soft-circled” to reach the $250m goal by year-end. It will cap commitments at $300m. Fund III had its first closing in November and has invested approximately $90m in transactions, making new senior debt investments between $2m and $25m in opportunistic, distressed and value added commercial real estate. Kevin Miller, CEO of Thorofare Capital, said in a written statement that Fund III is “positioned to continue to close loans quickly in order to help borrowers finance opportunistic acquisitions, recapitalizations, discounted pay offs, note acquisitions, and other special situations such as open-bid auctions.” The firm’s previous fund, Thorofare Asset Based Lending Fund II, originated approximately $230m in loans and has realized over 60% of invested capital since the end of its investment period in December. “The support of our L.P.s, represented by a recommitment rate north of 90%, has been vital to the success of both the firm and our current fund,” Miller said. Thorofare, which specializes in commercial real estate bridge loans, has closed 90 transactions nationwide totaling $350m of unlevered equity capital since it was founded in 2010.

Nashville-based Giarratana Development has secured $75.9m in loans for the construction of the SoBro luxury rental apartment tower in downtown Nashville, Tennessee. Chicago-based BMO Harris Bank provided a $58m senior construction loan, while New York-based NorthStar Realty Finance – through its lending entity QARTH Holdings NT-II – provided a $17.9m mezzanine loan on the $90.8m project. […]

Wells Fargo Bank has provided a $311.8m loan to finance part of the The Howard Hughes Corporation’s Downtown Summerlin project in Las Vegas, Nevada. The three-year loan has an initial maturity date of 15 July, 2017, with two one-year extensions and an initial interest rate of one-month LIBOR plus 2.25%. The loan will be used […]

Canadian Pension Plan Investment Board and Metropolitan Life have acquired $475m of mezzanine debt as part of a refinancing of five Kyo-ya Hotels & Resorts in Hawaii and California. CPPIB through its CPPIB Credit Investments II vehicle has bought a $300m junior mezzanine (B) loan at Libor plus 6.6% secured on the hotels, while MetLife invested in a $175m senior mezzanine (A) loan with a Libor plus 4.5% interest rate. The Hawaiian hotels – Sheraton Waikiki, Sheraton Maui Resort & Spa, Westin Moana Surfrider and The Royal Hawaiian – and The Palace Hotel (San Francisco) have a combined 4,016 rooms. The hotels were refinanced by Deutsche Bank via its New York-based German American Capital Corporation subsidiary. GACC was the originator and mortgage loan seller, while the Japanese Kyo-ya Hotels & Resorts is the borrower. A two-year, floating-rate loan with three one-year extension options, secured by the fee and/or leasehold interests in the full-service hotels was securitised as COMM 2014-KYO and, in addition to the first mortgage loan, GACC originated the two mezzanine loans on the deal. Deutsche Bank priced the $551m top slice of the seven-tranche $1.4bn CMBS deal at Libor plus 90 basis points, with S&P and Morningstar rating it AAA. The quality and location of the properties, positive operating trends and strong Hawaiian tourism were among the strengths listed by the agencies in presale reports. The hotels operate under three different Starwood-affiliated brands: Westin, Sheraton, and The Luxury Collection. The issue is the second refinancing of the portfolio in just over a year; in 2013 Goldman Sachs issued a $1.1bn CMBS, GSMS 2013-KYO, backed by most of the same collateral. In an unsolicited commentary on the latest deal, Fitch said that the top tranche rating was consistent with its own AAA rating, but that it “likely” would have assigned subordinate ratings to subordinate tranches, because of the $300m of additional debt that has been tacked on, even though 1,142-room Sheraton Princess Kaiulani, the weakest property in the GSMS 2013-KYO pool, does not feature in the current issue. “The increase in total debt and the reduction in supporting collateral should give investors pause,” the Fitch report stated, calling the additional debt part of a “troubling trend” among US CMBS lenders. Fitch's maximum leverage for a 'B-' rating is 80.5% which would allow $1.159bn of debt, and a spokesperson would elaborate only by saying that the LTV on $1.4bn would be materially higher. S&P acknowledged that at an 82.6% LTV based on its valuation, the loan is “highly leveraged” and “higher than most single-borrower transactions we have rated recently.” With the mezzanine debt, the LTV increases to 110.6%. “We are aware of the risks Fitch highlighted and factored them into our analysis, but disagree with their conclusions,” a spokesperson for S&P said. “There have been numerous occasions where we believed that the risks were greater than our competitors did but we think the market benefits from a diversity of opinions on credit risk.”

JPMorgan Chase Bank has provided a five-year, $190m loan on CV Properties’ new One Channel Center office building in South Boston. The bank placed an additional $50m mezzanine loan through global investment management company BlackRock. One Channel Center (Credit: David Ryan, The Boston Globe). One Channel Center (Credit: David Ryan, The Boston Globe). The debt replaces $170m of construction financing that the lenders provided two years ago and allows for a recapture of equity. The 500,000-square-foot, 12-storey office building and an adjoining 970-car garage is fully-leased to financial services giant State Street, which opened the new building last month. Completed last year, it can house more than 3,500 employees. One Channel Center is part of the broader Channel Center project, a 2m-square-foot mixed-use development with office, residential and retail, and plans for at least two open space parks. CV Properties bought an undeveloped portion of Channel Center from Beacon Capital Partners LLC in 2007 for a reported $21.5 million, overseeing the development and redevelopment of about 1m square feet with the backing of capital partner AREA Property Partners, which was later acquired by Ares Management. CV Properties and JP Morgan Chase Bank declined to comment.

Houston, Texas-based Crimson Advisors has secured a $105.6m loan from Landesbank Hessen Thuringen (Helaba) for the construction of a residential development at 546 West 44th Street in Manhattan’s Hell’s Kitchen neighborhood. A joint venture of Crimson Real Estate Fund, DHA Capital and USAA Real Estate Company purchased the block-through site and former parking garage — between 10th and 11th […]