Shorenstein Completes Mezzanine Loan Investment

NEW YORK CITY-In its first venture in this area, Shorenstein Co. has purchased a $20 million junior mezzanine loan from CDC Mortgage Capital Inc., a New York-based lender. The junior mezzanine loan was originated by CDC in late 2002 as a portion of a refinancing of two Manhattan office buildings: 350 Madison Ave., a 382,969-sf office building with street level retail; and 1440 Broadway, a 748,032-sf office building at 40th and Broadway. Both buildings were recently extensively renovated by Max Capital Management Corp. and are currently owned by a joint venture of Max Capital Management Corp. and The Landis Group.

Chairman and CEO Douglas Shorenstein notes, “This opportunity to participate as a junior lender in the capital structure of prime Manhattan office real estate is a natural extension of our traditional role as an equity owner. We will consider similar future investments on a selective basis.” Shorenstein purchased the loan on behalf of its sixth investment fund, a private commingled fund formed in 2001 to make equity and debt investments in class A office buildings located throughout the US. This fund has previously made investments in US Bank Plaza in Sacramento, 500 West Monroe in Chicago, Two Liberty Place in Philadelphia, and 450 Lexington Ave. in New York. The fund is capitalized with $609 million of equity and is currently more than 50% invested.