David Rosenberg and Seth Grossman of Meridian's New York City office negotiated on behalf of the borrowers, Jeff Sutton of locally based Wharton Properties and Manhattan based SL Green Realty Corp., to secure an interest-only, floating-rate loan. The JV partnership was created to identify and invest in under-performing retail assets. The first venture was to acquire the fee interests in two adjoining retail buildings at 1551 and 1555 Broadway, and in a third retail and commercial building at 21 W. 34th St. The second joint venture included acquisition of a mixed-use property at 141 Fifth Ave. The transactions totaled approximately $162.5 million.

After purchasing the property several years ago, Sutton bought-out Hugo Boss from its ground-floor retail lease and then signed luxury retailer Armani to a 15-year, multi-floor lease, for more than 40,000 sf. The four-level retail condominium at 717 Fifth Ave. boasts a three-story glass atrium. Laura Pomerantz of PBS Real Estate represented Armani in that transaction. The space is currently being built-out by Armani and the anticipated opening will be early 2009, which Grossman says is still on track.

Grossman tells GlobeSt.com that completing the refi now was extremely important. "Existing debt came due on the day that we closed with no extensions—it needed to happen with no room for error or the borrower would have needed to write a check for $192 million to payoff the existing that day." He continues "that timing was on there side however, because the Armani lease was signed and Hugo Boss was bought out of their space to make that happen since the initial mortgage was put on." The borrowers increased rents "tremendously" since the original financing, which is why, Grossman says, "the borrowers were able to replace a $192.5-million loan—which included roughly $60 million of mezz--with a new first mortgage of $285 million."