The Debt & Equity Finance Group arranged $21 million in first mortgage financing on behalf of Northwind Group for the $30.1 million acquisition of 66 Pearl Street, a six-story, mixed-use residential property located in the heart of New York City’s Financial District.
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FOR IMMEDIATE RELEASE
Mission Capital Advisors Arranges $21 Million in Financing on Behalf of
Northwind Group for Acquisition of 66 Pearl Street
Competitive Process Generates Tremendous Interest in
Six-Story Landmarked Multifamily Mixed-Use Property in New York’s Financial District
New York, NY (October 30, 2014) — Mission Capital Advisors announced that its Debt & Equity
Finance Group arranged $21 million in first mortgage financing on behalf of Northwind Group for the
$30.1 million acquisition of 66 Pearl Street, a six-story, mixed-use residential property located in the heart of New York City’s Financial District.
The Mission Capital team, led by Jonathan More, and which also included Ari Hirt, Steve Buchwald and David Behmoaras represented the sponsor, Northwind Group, in arranging the financing with Sterling National Bank. Earlier this year, the same team also arranged an $11-million first mortgage financing on behalf of Northwind for 40 Wooster Street, a six-story office building located in New York’s historic Cast Iron district of SoHo.
“This was a rare opportunity to acquire a prime asset with strong upside potential in the heart of the Financial District, and we selected Mission Capital again based on their extensive knowledge of the New York City market, and capabilities to help us secure the most efficient source of financing,” said Ran Eliasaf, Managing Partner of Northwind Group.
“Northwind has quickly become one of New York’s most savvy boutique real estate investment firms, with an eye for value and an ability to get attractive deals done quickly and seamlessly,” said More.
“Mission Capital leveraged its extensive relationships with the capital markets to create a competitive process, receiving incredible interest based on the stellar sponsorship and quality of collateral in the country’s top multifamily and retail market. We were ultimately able to secure financing at a very low fixed interest rate and attractive proceeds with flexible terms,” More added.
66 Pearl Street is a six-story, 43,546 square-foot, landmarked pre-war mixed-use building located between Pearl and Water Streets in the heart of New York’s Financial District, just four blocks from Wall Street. The property is comprised of 42 residential units, with 6,485 square feet of ground floor retail.
About Mission Capital Advisors
Founded in 2002, Mission Capital Advisors, LLC is a leading boutique real estate capital advisory firm specializing in high value-add debt, mezzanine, and JV equity, with offices in New York City, Florida, California and Texas. The firm is keen on maintaining its reputation as the premier New York-based real estate capital advisory firm. Mission Capital’s seasoned team of industry-leading professionals is committed to achieving clients’ business objectives while maintaining the highest levels of integrity and trust. For more information, visit www.www.missioncap.com.
Mission Capital announced that its Debt & Equity Finance Group arranged $21 million in first mortgage financing on behalf of Northwind Group for the $30.1 million acquisition of 66 Pearl Street, a six-story, mixed-use residential property located in the heart of New York City’s Financial District.
Mission Capital Advisors Arranges
$21M in Financing on Behalf of
Northwind Group for Acquisition of
66 Pearl Street
10/30/14
Competitive Process Generates Tremendous Interest in Six-Story Landmarked
Multifamily Mixed-Use Property in New York’s Financial District
Mission Capital Advisors announced that its Debt & Equity Finance
Group arranged $21 million in first mortgage financing on behalf of Northwind Group for the $30.1 million acquisition of 66 Pearl Street, a six-story, mixed-use residential property located in the heart of New York City’s Financial District.
The Mission Capital team, led by Jonathan More, and which also included Ari Hirt, Steve Buchwald and David Behmoaras represented the sponsor, Northwind Group, in arranging the financing with Sterling National Bank. Earlier this year, the same team also arranged an $11-million first mortgage financing on behalf of Northwind for 40 Wooster Street, a six-story office building located in New York’s historic Cast Iron district of SoHo. “This was a rare opportunity to acquire a prime asset with strong upside potential in the heart of the Financial District, and we selected Mission Capital again based on their extensive knowledge of the New York City market, and capabilities to help us secure the most efficient source of financing,” said Ran
Eliasaf, Managing Partner of Northwind Group.
“Northwind has quickly become one of New York’s most savvy boutique real estate investment firms, with an eye for value and an ability to get attractive deals done quickly and seamlessly,” said More. “Mission Capital leveraged its extensive relationships with the capital markets to create a competitive process, receiving incredible interest based on the stellar sponsorship and quality of collateral in the country’s top multifamily and retail market. We were ultimately able to secure financing at a very low fixed interest rate and attractive proceeds with flexible terms,” More added.
66 Pearl Street is a six-story, 43,546 square-foot, landmarked pre-war mixed- use building located between Pearl and Water Streets in the heart of New York’s Financial District, just four blocks from Wall Street. The property is comprised of
42 residential units, with 6,485 square feet of ground floor retail.
About Mission Capital Advisors
Founded in 2002, Mission Capital Advisors, LLC is a leading boutique real estate capital advisory firm specializing in high value-add debt, mezzanine, and JV equity, with offices in New York City, Florida, California and Texas. The firm is keen on maintaining its reputation as the premier New York-based real estate capital advisory firm. Mission Capital’s seasoned team of industry-leading professionals is committed to achieving clients’ business objectives while maintaining the highest levels of integrity and trust. For more information, visit www.www.missioncap.com.
Northwind Group, a Midtown East-based boutique real estate investment firm, bought 66 Pearl Street for $30.1 million. Mission Capital Advisors helped Northwind secure a $21 million mortgage from Sterling National Bank to finance the property.
Within the past month, interest rates have been dropping even lower, to 3%, reports Ari Hirt, a director at Mission Capital in New York City.
New Ways to Bridge the Gap
October 28th, 2014
By Erika Morphy
Charles Everhardt of Lockwood Property Holdings uses bridge financing to keep operations flowing, although he doesn’t call the product by that name. Lockwood typically has multiple projects going at one time as it seeks out development opportunities for a group of sophisticated investors. When it spots a deal that might work, it puts the property under contract. At this point in the process Lockwood would be expected to put up soft or earnest money, which could be, depending on the project, millions of dollars. That is quite a dip into its capital reserves, Everhardt says. “We’d rather use our own capital for due diligence or corporate overhead rather than tie it up for big earnest money deposits,” he says. So it turns to a new startup called Winchester Equities, based in New York City, which fronts the company the money for the deposit. Everhardt doesn’t consider it bridge finance in the traditional sense in that there isn’t collateral in play and the company uses the money for a far shorter term than normal bridge loans. Winchester Equities’ financial product is, though, short-term money that addresses a gap in the traditional lending markets—and that is indeed bridge financing, at least circa 2014. In short, bridge financing is expanding beyond its traditional definition of short- term money provided for such uses as paying off a loan or to adding value to a project. It is being used, as Lockwood illustrated, to front deposit money for an acquisition. It is also being used to pay off highly leveraged and maturing CMBS loans—scenarios in which oftentimes the bridge providers are about the only source available, says Ann Hambly, founder and CEO of the Dallas-based 1st Service Solutions. “Bridge lenders have morphed their business very creatively in recent years and are filling an important gap in the market right now by paying off these overleveraged loans,” she says.
3% BRIDGE MONEY
Perhaps the most obvious way bridge lending has changed in recent years, though, is its substantial drop in pricing. “Bridge financing is cheaper these days because debt is cheaper overall,” says Eli Verschleiser, chairman of MultiGroup of Cos., which has used bridge financing for its own projects and offers it from its capital markets group. “Credit lines are cheaper and there are more providers in the space, so it is more competitive, too.” For example, REITs are more active in bridge financing, he says, especially non- traded REITs, which have raised funds in recent years and now need to put that capital out in the market. Bridge lending is now being priced according to internal rate of return metrics, Verschleiser says, pointing to rates as low as the 9% to 10% range. Within the past month, interest rates have been dropping even lower, to 3%, reports Ari Hirt, a director at Mission Capital in New York City. “We recently got a quote on a bridge loan at 3% for an apartment project in New York City,” he says. Eleven percent is reasonable, he adds—if you are talking about, say, unentitled land in California. But good collateral in good locations can find much better rates. The company is securing a bridge loan for a hotel portfolio in North Carolina at 4%, Hirt says. “There are renovations going on, but the cash flow is still good,” he explains. For a 4% loan, a company can secure financing in the 70% leverage range. At 5%, the leverage can rise even higher.
RISKY LOANS?
Not everyone sees this drop as strictly a reflection of the price of money. A loosening of underwriting standards and investors that are eager to eke out yield are also accounting for some of these low interest rates, says Ross Yustein, chair of the real estate practice at Kleinberg Kaplan in New York City. “That is definitely part of the story. “Development by nature is time sensitive and the sequencing is difficult,” he adds. “Bridge loan providers are taking a gamble that the next ‘step,’ whether it’s a sale or a successful renovation will happen.” Market timing is also part of the mix that a lender should be pricing into the bridge loan product, Yustein says—but is increasingly not. “Sure, the demand for condo units in Manhattan is strong right now and it’s not such a huge gamble for the bridge lender,” he says. “But at some point, that logic runs out, even in the short term.” Markets have been known to crash suddenly, he points out. Leverage ratios are also rising, which is making some lenders queasy especially considering where cap rates are, says Phil Long, managing director and chief credit & risk officer at Berkadia. “Even a 75% loan today is much more aggressive than two years ago based on where cap rates have gone,” he says. “We are further along in the cycle than most people would realize, I think.” Berkadia has kept its leverage ratios the same—it will only go to 75%, possibly 80% if there is a partner. “We’ve tried to address the leverage issue by coming in on spread,” says Long.
PAYING OFF CMBS
For some borrowers, though, the cost of the bridge loan is almost irrelevant—it just may be the only source of capital that will salvage an unfortunate position. That is increasingly the case for CMBS borrowers with highly-leveraged loans that are maturing now, says 1st Service Solution’s Hambly. Especially for loans that originated in 2005, many borrowers are finding they can’t pay off the loan via traditional lending sources. “Bridge lending is probably the only source available to fill this need right now,” she says. The alternatives are simply too costly. Borrowers can lose their property or extend their loan, but that extension can cost up to a percentage point per year. A bridge loan with a three-year term is a more cost-effective solution. “I personally have touched at least 10 deals like this in recent years, and the lenders I have spoken with all believe an onslaught of these deals are coming,” says Hambly, pointing to industry statistics that show that of the maturities coming due in the next year, some 34% of them are leveraged over 80%, based on current value. “We will definitely see many more bridge loans being originated for that reason,” she says. In addition, many of these loans are getting very creative, offering such features as allowing some of the interest to accrue and then using it to improve the property, Hambly relates.
STRETCHING A BALANCE SHEET
Other bridge lenders are morphing to address other needs in the market for short-term money. Winchester Equities, which provided the loan to Lockwood Property Holdings, is one example: it specifically focuses on companies that need earnest money deposits for an acquisition. Depending on the deal size, these deposits can be significant and if a company is making several acquisitions, this requirement can quickly tap out its cash flow. “We found an inefficiency in the market,” explains Avi Benamu, managing director of the company, which just started operations this year. “Oftentimes investors, especially mid to large syndicators or investors that pool capital from other investors, find themselves in situations where they don’t have the liquidity but still want to acquire a property. They can’t get conventional financing because they don’t have the hard asset in their possession to back up the loan.” Winchester can make that loan by structuring the deposit as a real estate option, similar to a stock option, explains Benamu. Roughly, the transaction goes like this: The borrower submits the application form with a $2,500 fee. That fee is used for attorneys to review the documentation and contract and escrow arrangements. Then, Winchester sets up an LLC, which will be used for the purchase agreement. It submits the option documents to the purchaser, charging him or her 2.5% upfront. So for a $1-million deposit, the purchaser would have to provide Winchester with $25,000. Once the paperwork is complete and the 2.5% paid, Winchester Equities places the $1 million in the escrow account. If the purchaser decides not to go through with the deal, the contract is terminated and everyone walks away. If the purchaser wants an extension, he or she pays Winchester another point for another 30 days. If the purchaser decides to go through with the deal, he exercises the option, takes control of the LLC and the escrow deposit goes from soft to hard. Winchester has a current pipeline of $45 million in soft deposits of which five to 10% are funding acquisitions, Benamu says. “These are large projects where the syndicators have experience in raising capital, but some of the deals are too large for them.” http://www.globest.com/reforum/69_7/national/finance/New-Ways-to-Bridge-the-Gap-351924.html?pg=2
Mission Capital Advisors has arranged $31.4 million in construction financing for a 215-unit multi-family development in Indianapolis.
Mission Capital Advisors provides
$31 million in construction financing for 215-unit apartment complex in Indianapolis
October 15, 2014 Mission Capital Advisors has arranged $31.4 million in construction financing for a 215-unit multi-family development in Indianapolis. The financing included $7.1 million of institutional joint venture equity and a $24.3 million construction loan for the 225,000-square-foot project at 600 E. Michigan St. The project will include two four-story multi-family buildings surrounding a landscaped courtyard. Brad Lyons, Ari Hirt and Steven Buchwald of Mission Capital Advisors represented the sponsor in arranging the financing with PNC Bank.
Mission Capital Advisors’ debt and equity finance group has arranged $31.4 million in construction financing for a 215-unit multifamily complex in Indianapolis.
Mission Capital Arranges $31.4M in
Financing for Multifamily
Development in Indianapolis
October 14th, 2014
INDIANAPOLIS — Mission Capital Advisors’ debt and equity finance group has arranged $31.4 million in construction financing for a 215-unit multifamily complex in Indianapolis. The financing comprised $7.1 million of institutional joint venture equity and a $24.3 million construction loan for the 225,000- square-foot project. A local sponsor is developing the project, which is located at 600 E. Michigan St. The project will comprise two, four-story multifamily structures around a landscaped courtyard with a resort- style pool, constructed over one level of subterranean parking. Brad Lyons, Ari Hirt and Steven Buchwald of Mission Capital Advisors represented the sponsor in arranging the financing with PNC Bank. http://rebusinessonline.com/mission-capital-arranges-31-4m-in-financing-for-multifamily-development-in-indianapolis/#sthash.s7PxPWEd.dpuf
Mission Capital Advisors’ Debt & Equity Finance Group arranged $31.4 million in construction financing for the construction of a four-story, 215-unit multifamily community over one level of subterranean parking in downtown Indianapolis.
Mission Capital Advisors has just arranged $31.4 million in construction financing for the construction of a four-story, 215-unit multifamily complex in downtown Indianapolis.
Over 100 top NYC real estate executives, including from Mission Capital, participated in “Sleep Out” in Times Square oct 9th to draw attention to the plight of homeless teens and help them find a way off the street.
PHOTO GALLERY: Real estate execs
“Sleep Out” in Times Square for homeless teens
October 13th, 2014
Over 100 top New York City real estate executives participated in “Sleep Out” in Times Square Oct. 9th to draw attention to the plight of homeless teens and help them find a way off the street. The “Real Estate Executive Sleep Out,” organized by a committee of real estate professionals, along with Covenant House, was a first-time fundraising event here in New York that will bring together those committed to spending one night on the streets to support programs for homeless youth in New York. Matt Schmeelk and Arvind Chary “We decided to form our own spin-off from national “Sleep Outs” held by Covenant House that represent other industries,” said Matt Schmeelk, senior executive vice president at Kensington Vanguard National Land Services, who is the co- chairman of the “Sleep Out” Committee, along with Arvind Chary, managing principal at Atlas Real Estate Partners. Both Schmeelk and Chary approached their real estate colleagues in New York City to create the “Real Estate Sleep Out Committee” and got the ball rolling. Schmeelk, who is also on the board of Convenant House here in New York said the event raised over $220,000 and more is expected in the coming days and weeks. “We want to thank all who took part in this international movement that has raised more than $7 million dollars for homeless youth in North America since 2011,” said Chary. “We wanted to do whatever we could to stand behind the mission of the Covenant House that provides shelter, safety and second chances for today’s youth,” added Schmeelk. parking lot. The “Sleep Out” took place at Covenant House on Oct. 9th at 460 West 41st Street. Participants got a chance to meet and interact with young people helped by Covenant House before bedding down for the night outside in sleeping bags in the Covenant House’s The “Real Estate Executive Sleep Out” Committee includes executives from top real estate companies that include: Witkoff Group; RREEF Transactions; Lone Star Funds; Madison Development; Mission Capital; UBS Real Estate; Thor Equities; Cassidy Turley; Convene and TOWN. Those who participated in the “Sleep Out” represent companies that also include: Kensington Vanguard National Land Services, Witkoff Group, RREEF Transactions, Kushner Companies, Hines, Lone Star Funds, Related Companies, East End Capital Madison Development, CIM Group, Cassidy Turley, The Blackstone Group, DHA Capital, DelShah Capital, Synapse Capital, UBS Real Estate, Virgin Hotels, Angelo, Gordon & Co., Convene, Westbrook Partners, Thor Equities, DDG Beacon Capital Partners, World Class Capital, Northwood Investors, Mission Capital, Belvedere Capital, Forest City Ratner Companies, Colony Capital, Alto Investments, Marcus & Millichap, Rialto Capital, 60 Guilders, LLC, Bank of America, TOWN, Massey Knakal, Excelsior Equities and Taconic Investment Partners. Others are: Property Markets Group, Morgan Creek Capital Management, Walker & Dunlop, Spear Street Capital, Silverpeak Real Estate Partners, Sierra Real Estate, Brookfield Real Estate Financial Partners, Skyview Capital, Escape, Rackson, Hudson Advisors, Sumaida + Khurana, Vesper Holdings, Park 7 Group, Rockport Equity, Rockwood Capital, Marsh, Phasa Development, LLC, Ladder Capital, Rambleside Holdings, Vornado Realty Trust, Bisnow Media, Silverpeak Real Estate Finance, Eastdil Secured, Lee & Associates, The Square Foot, The Durst Organization, Investcorp International, Inc., Winter & Company Commercial Real Estate Finance, JMC Holdings, Kaplan Equities, DLG, Iron Hound Management, Paramount Group, Rialto Capital, Greenberg Traurig, Alpha Partners, Centaur Properties, Fir Tree Partners, Rockwood Capital, Hudson Advisors, Northeast Equity, Legacy Builders and Crown. http://www.rew-online.com/2014/10/13/real-estate-execs-sleep-out-in-times-square-for-homeless-teens/
Mission Capital Advisors arranged $31.4 million in construction financing for a four-story, 215-unit multifamily complex in Indianapolis.
MORTGAGE OBSERVER WEEKLY
PNC Provides $24M Construction Loan for Indianapolis Project
1lilsion Capital Advisors arranged S3L4 million in construction financing for a four-story, 215-unit multifamily com plex in Indianapolis, Mortgage Observer
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The guessing game is on again with Friday’s excellent employment numbers: when will the Federal Reserve Bank raise interest rates and what products will be affected? One concern the Fed has about its plans to raise interest rates is that, for all the warnings and discussion and pontification of the last year about the expected increase, investor may well be caught off guard.