(Read more on the debt and equity markets.)
NEW YORK CITY-San Francisco-based Shorenstein Properties LLC has purchased a $50-million junior mezzanine loan from Deutsche Bank AG. The junior mezzanine loan is collateralized by equity interests in a limited liability company which is the indirect owner of 660 Madison Ave., a 254,896-sf office condominium located at the corner of 61st Street and Madison Avenue in Midtown.
The office condominium comprises floors 10 through 23 of the building. Floors one through nine are occupied by the flagship store of high end retailer Barneys New York. The office condominium, which is highly attractive to financial services firms such as hedge funds because of its views and easy access to the Upper East Side, is currently 90% leased.
Major tenants include the Corcoran Group, Dolce & Gabbana, the Royal Bank of Scotland, Drake Partners, and Lexington Partners. Shorenstein purchased the loan on behalf of its ninth investment fund, Shorenstein Realty Investors Nine LP, a $1.3-billion private commingled fund formed early this year.
Robert Underhill, managing director and capital transactions group head at Shorenstein, tells GlobeSt.com that the company purchased the debt because it provides an attractive yield on an outstanding piece of real estate. He notes that while there is a certain amount of dislocation in the equity market right now, and while finding deals that make sense requires heavy lifting, the company has found a unique and attractive opportunity in this deal.
Douglas Shorenstein, chairman and CEO of Shorenstein, explains that "this mezzanine loan acquisition provides an excellent opportunity for our fund to obtain a strong risked-adjusted return by participating in the economics of a high quality asset in Midtown Manhattan through a financing structure backed by a well capitalized borrower." The asset was recently purchased by Italian real estate company Risanamento through a non-recourse financing of $275 million provided by Deutsche Bank.
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
