Island Capital Buys Division of Centerline for $110M

NEW YORK CITY—Locally based real estate lender Centerline Capital Group has agreed to sell its special servicing and real estate debt fund management arm to Andrew Farkas’ Island Capital Group LLC for $110 million.

“We have worked closely with Andrew Farkas and the Island Capital team for many months to make this transaction happen,” says Marc D. Schnitzer, president and CEO of Centerline, in a release announcing the deal. “We are now ready to recapture our position as an industry leader and increase our market share.”

The sale is an offshoot of a larger recapitalization effort that Island Capital and Centerline has been engaged in since September 2009. The endeavor has helped Centerline eliminate about $1.6 billion of aggregated liabilities and contingent exposures. It has also provided more than $100 million of new equity by restructuring a hefty portion of Centerline’s outstanding debt.