According to MRC, the deal highlights the firm's investment strategy and the effectiveness of its vertically-integrated platform, which includes in-house expertise necessary for equity investments, debt acquisitions, and new loan originations. That expertise allowed MRC to quickly access the real estate ownership and management knowledge required to understand and underwrite the transactions from both the debt purchasing and loan origination perspectives.

“This transaction exemplifies everything that makes our model successful,” adds Zegen. “The highlights here are speed, flexibility and vertical integration, in aid of risk-adjusted performance. We went into the debt acquisition planning to take ownership and complete the project.

“But when the opportunity came to sell the property after we cleaned up title,” he continues, “we already had analyzed the project thoroughly and insisted on staying involved as the bridge lender. In the end we added value on the initial loan acquisition, and reduced our market risk by lending to the deal rather than owning it. There are few organizations that could accomplish what we've done here, and I'm truly proud that we brought this transaction to fruition.”

Constructed in 1908, 45 John St. was a 12-story, 102,000-square-foot office building until the previous sponsor acquired the property in 2006 and sought to convert it to an 84-unit luxury residential condominium. In addition to residential space, the property has two retail units, including a 5,000-square-foot ground floor space and a 3,000-square-foot space below grade.

After failing to meet the target completion date of October 2008, the original sponsor defaulted on the first mortgage during the downturn. The original lender instituted foreclosure proceedings, which were close to completion. The project is currently 80% complete and is slated for completion within 12 months.

Cantor Fitzgerald represented the seller of the defaulted mortgage. Matthew Lesser of Leslie Garfield represented MRC.