Shorenstein Buys $250M Mezz Office Package

NEW YORK CITY-San Francisco-based Shorenstein Properties LLC has purchased a $250 million senior mezzanine loan backed by 450 Lexington Ave., a 910,000-sf office building located in the Grand Central submarket of Manhattan. The loan was purchased on behalf of Shorenstein Realty Investors Nine LP, a $2.06 billion private commingled fund formed in the spring of 2007.

The fund was part of a five-year, fixed-rate financing package made to the building owner, Lexington Operating Partners LLC, in Aug. 2007. The transaction to acquire two separate mezzanine loans is the ninth debt purchase made by the company in the last nine months, and brings its total debt holdings to $685 million. A source close to the deal tells GlobeSt.com that one loan had a face value of $200 million and the other one was $50 million.

Douglas Shorenstein, chairman and CEO of Shorenstein Properties, says in a prepared statement that “our ability to quickly and expertly assess, underwrite and close transactions despite ongoing dislocation in the real estate credit markets means that we continue to see solid opportunities to acquire debt and equity interests in key class A buildings generating attractive risk-adjusted yields throughout our target markets in the US.”