Los Angeles-based Preylock Real Estate Holdings has nabbed an $89 million loan for its acquisition of the Willow Creek Corporate Center in the tech submarket of Redmond, Wash., Commercial Observer can first report.

Deutsche Bank provided the 10-year CMBS loan, sources close to the deal told CO, which features full term interest-only payments.

The debt was negotiated by Meridian Capital Group’s Kovi Elkus, Jackie Tran and Seth Grossman, all of whom are based in the brokerage’s Southern California offices. Meridian officials declined to comment on the identity of the lender or borrower.

Preylock snapped up the Class-A office complex in early August for $136 million, according to The Registry. It comprises 421,000 square feet across seven buildings that are fully leased to Facebook—the business park’s anchor—and GE. The seller was Blackstone Group subsidiary BRE WA Office Owner, which purchased the property for $208 million in 2015.

The high-end campus, at 10675, 10735, 10785, 10865, 10915, 10545 and 10525 Willows Road NE in the Seattle suburb, is also located close to Microsoft’s world headquarters at One Microsoft Way. A lack of new construction in the area and strong market fundamentals has resulted in a 20 percent rent growth at Willow Creek Corporate Center over the past 36 months.

“Over the past three to five years, this corridor of Redmond has seen tremendous growth, transforming into what Silicon Valley was 10 to 15 years ago. Many lenders quickly recognized that strength,” Elkus said in prepared remarks. “Additionally, it was imperative to find a lender that would provide terms reflective of the quality of the existing tenants, including Facebook / Oculus and GE, which is why the sponsor received 10 years of interest-only payments despite a 100 percent tenant roll during the loan term. Meridian was also able to negotiate aggressive terms by working with a great lender and focusing on the sponsor’s experience, business plan, and location.”

In November, Meridian also arranged a $195 million bridge loan from Natixis for Preylock’s acquisition of seven triple-net-leased office properties in Santa Clara, Calif., as previously reported by CO.

A spokesman for Deutsche Bank and officials at Preylock did not immediately return requests for comment.

Meridian Capital Group has hired Adam Hakim and James Murad, former managing directors at Eastern Consolidated, Commercial Observer can first report.

The duo will focus on arranging financing for the acquisition, construction and repositioning of properties and are joined by Andrew Iadeluca, formerly an associate director at Eastern. Hakim joins as a senior managing director, Murad as a senior vice president and Iadeluca as a director. 

“Adam and James share the unique characteristics and unrelenting work ethic that differentiate Meridian in the marketplace and with their addition we aim to substantially increase our market share in the development and redevelopment space,” Meridian Chairman and CEO Ralph Herzka said in prepared remarks.

Hakim and Murad have worked together for six years, having first crossed paths at brokerage GCP Capital Group in 2012 then moving to Eastern Consolidated in 2015. Iadeluca has worked with the two debt professionals for several years, also.

As first reported by CO, the brokerage announced it was closing its doors after 37 years of business in June.

During the team’s time at Eastern they closed over $10 billion in transactions across various property types, with a specific focus on complex construction financings and value-add loans. Those deals included a $350 million construction loan for Fosun International and J.D. Carlisle Development Group’s luxury condominium tower at 126 Madison Avenue in NoMad; a $215 million construction loan for Cape Advisors’ luxury condominium development at 537 Greenwich Street; a $130 million construction loan for Delshah Capital’s five-building, 205-unit luxury rental conversion located at 30 Morningside Drive; and a $121 million construction loan for Sam Chang’s McSam Hotel Group’s 45-story, 526-key hotel development located at 140 West 28th  Street.

“We join Meridian at a terrific time in the firm’s history as well as at a critical moment in the debt capital markets arena. James and I are excited to combine our deep borrower and lender relationships with everything that the Meridian platform has to offer,” Hakim said. “The access to real-time information and opportunity to collaborate with the immense talent internally is going to enable us to service our clients and meaningfully grow our business, which is always exciting.”

“Despite an immensely competitive financing environment, Adam and James have built an extraordinary track record by delivering exceptional value to their clients across a variety of complex and highly nuanced transaction types. Their focus on client relationships and ability to outperform the market exemplify the qualities that have made Meridian the region’s leading debt capital markets firm,” Yoni Goodman,  the president of Meridian’s investment sales division, added. 

In June, Meridian also nabbed Eastern’s James Famularo to helm the firm’s new retail division, as first reported by CO.

News organizations with food divisions have started to move from keeping its readers informed to keeping their bellies full.

Publishers like Vice and BuzzFeed have taken a page out of Time Out Group’s book and license out their names to open up branded food halls, food carts and pop-up events across the country as news companies struggle to keep the lights on.

“The branded food halls are going to be part of the next evolution of this trend,” said Garrick Brown, a vice president of retail research at Cushman & Wakefield. “You’ve got this built-in mechanism for advertisement, for branding—it makes perfect sense for media players to do this.”

With media companies and malls struggling, the new venture could help both survive. It offers a new revenue stream for media companies to help offset layoffs as advertisement dollars continue to shrink, while mall owners hope the media-branded food halls can draw customers out of their homes and back through its doors.

“When you can work from home, shop from home, do everything from home what are the things that you’re willing to leave home for,” retail consultant Kate Newlin said. “Going to a food court probably isn’t on that list but going to one with Vice could enter my consideration.”

Two weeks ago, Vice announced it licensed its food vertical, Munchies, to Triple Five Group for a food court inside Triple Five’s massive—and long-delayed—American Dream complex in New Jersey.

“We wanted to partner with someone who was going to be a little bit different, who was going to be not expected,” Dimitri Lalagos, a senior vice president of leasing for American Dream, said. “They can reach out to attract edgy, cool restaurateurs who otherwise might not consider this type of environment.”

A spokesman Vice did not respond to a request for comment and a spokeswoman for BuzzFeed declined to comment.

The 38,000-square-foot food court will have 18 eateries selected by Munchies along with space for the brand to film content and demonstrations from chefs, according to a news release. Under the deal, Triple Five will pay Munchies a licensing fee, along with royalties depending on revenue, while the publisher can sell merchandise inside, Digiday reported.

“We’re always looking for opportunities to expand the Munchies brand beyond digital media and provide fun, offline experiences for our fans to taste, interact and learn, as well as tell our stories to new audiences,” Munchies co-Founder and Publisher John Martin said in a prepared statement.

But Vice isn’t the only company going offline to attract readers. BuzzFeed’s Tasty set up two food carts in Madison Square Garden, video network Tastemade has begun opening branded cafés in Brazil and California and Refinery29 decided to expand its pop-up 29Rooms “to San Francisco, Los Angeles, and Chicago, to deliver this sensory, interactive experience to more people,” a spokeswoman said. A Tastemade representative from didn’t respond to Commercial Observer’s inquiry.

“I think anybody that crosses markets and utilizes different platforms to really get the word out, especially now when readership is down, is brilliant,” said James Famularo, the president of Meridian Capital Group‘s retail division. “It’s always smart when two companies come together and they utilize their own unique set of identifiers.”

British media company Time Out Group helped kick off the trend in 2014 when it opened the first Time Out Market in Lisbon, Portugal. It later became one of the top tourist destinations in the city on TripAdvisor within eight months and the group has begun work on replicating it in other cities.

“Rolling out Time Out Market globally is part of Time Out Group’s diversification and growth strategy,” Didier Souillat, the CEO of Time Out, wrote in an email. “We no longer only write about the best things of the city—we also create and deliver them.”

Time Out announced plans to open similar markets in London, Miami, Chicago and Boston and leased a 21,000-square-foot space in Dumbo’s Empire Stores earlier this year to bring one to Brooklyn. A spokeswoman for the publication didn’t provide a comment by publication time.

“It really is kind of a full-circle completion of their strategy, taking what they have in their magazine, in the online media, and putting it to life here in Dumbo,” said Jack Cayre, a principal of Empire Stores owner Midtown Equities.

The Brooklyn market, scheduled to open later this year, will bring 20 restaurants under one roof at 55 Water Street along with a rooftop space overlooking Brooklyn Bridge Park.

Midtown Equities fielded numerous requests for food hall operators in its warehouse-turned retail and office complex, but Time Out‘s reputation for finding the best eateries in the city made them stand out, Cayre said.

“Time Out are an authority on food and restaurants,” he said. “We believe that they were in a strategically better position to identify who the best of the best were.”

With or without the backing of a publication, food halls have been steadily on the rise across the country.

The number of major food halls nationwide is expected to triple to 300 between 2015 and 2020, according to an April report by C&W. As many as 190 of them will be opened by the end of this year, the report found.

Despite the rapid pace at which new food halls are opening up, the report found few have shuttered. Only five of them closed around the country in the last two years, Brown said.

As the food hall market continues to balloon, Brown expects a few more to close, but partnering with a media brand could help them keep the doors open and draw customers.

“As the marketplace becomes more crowded, the two winners are going to be the best quality projects and also the biggest name projects that can bring it people in without feeling overly corporate,” Brown said. “If you got this marriage with a huge brand name that’s guaranteed authenticity, that’s the grand slam.”

Update: The story has been updated to include comments from representatives from Time Out Group and American Dream.

Meridian Capital Group’s Shaya Ackerman and Shaya Sonnenschein love a challenge. The debt-arranging duo first joined forces in 2005 and have been closing deals—the more complex the better—ever since. Recent transactions include multiple condominium de-conversions in Chicago, including a $72 million deal with Ladder Capital on behalf of Strategic Properties of North America and a $70 million repositioning of the 2-million-square-foot Bell Works office campus in Holmdel, N.J.

Commercial Observer: How did you two first meet?

Shaya Ackerman: I started at Eastern Union Funding in late 2005 and Shaya was already at the shop. We connected during my first year on the first retail deal I brought in where he was doing some underwriting. We’ve been working together ever since. I came over to Meridian in 2014 and Shaya six months later. We complement each other nicely; he works well in the trenches and I’m a little more in the forefront of the deals, so it’s a nice little mix.

Shaya Sonnenschein: We had a funny thing when we first started working together. Shaya sent me an email with an attachment that was far too large for the company’s server so I gave him my Gmail account, which had my birthday in it. He thought I was messing with him because we have the same birthday. [Three years apart, Ackerman is 36 and Sonnenschein is 39].

The debt arranging business is a competitive landscape right now. What differentiates you from other brokers in the space?

Ackerman: I don’t think there’s any secret sauce, it’s about working hard and getting out there. But you really have to listen to your clients and understand their needs. Brokers can be very fast to push product that they’re trying to sell or the bank that they have money from and so on, but understanding your client’s needs in structuring deals is key. Some clients need some TLC on the front end in structuring deals to help with their equity position; some guys have that side of it already and are lacking on the debt side. It’s a case of understanding their business plan and the deal. I think it’s every good broker’s job to know the deal better than their client.

Sonnenschein: One scenario we had recently was with a client who was looking at a deal and he had a pile of utility bills to review and was feeling overwhelmed, so I said, “We’ll go through them for you.” We need to know the deal better than him, and we need to understand the trends and use our experience to be of value to him.

I would guess that experience also gives you a competitive advantage over the newer brokers in town?

Ackerman: Yes. We recently signed up a $250 million construction loan in New Jersey. A different broker was involved at first, but he didn’t make any headway with the deal after three or four months. The [sponsor]  called me and I signed it up a week later. The other [broker] was out there trying to get bank quotes for 60 to 65 percent leverage and I realized that the borrower didn’t want to put in $100 million of equity, and that he’d rather we got him higher leverage so he can put in $40 [million] to $50 million and get 85 to 90 percent leverage. The first broker [complained], “I didn’t know you were going to pay interest rates that high, I thought you wanted conventional bank rates of 3 to 4 percent.” The same thing happened to me a few years ago too, but you have to learn. You have to talk to your clients and understand their needs and preferences. Above all, the most important thing that’s probably the hardest thing is just constant communication. Good news, bad news, no news—you always have to communicate.

Is there such a thing as a typical transaction for you?

Ackerman: We do enjoy working structured, complicated deals. I feel like the market is tougher today and every deal needs a little TLC. I think the concept of “vanilla” deals is not around any more; there’s a lot of working through the numbers. We do a lot of land, ground-up construction and renovation loans. We’ve done a number of condo de-conversions in Chicago; we’ve done five or six of those deals. We’ve very familiar with Section 15 [of the Illinois Condominium Property Act,which governs de-conversions] and we’re busy educating lenders.

The first condo de-conversion we did was very hard. Buying 300 condo units and closing them all in a day, and it’s a long drawn-out process dealing with 300 different sellers. You can imagine structuring a loan and dealing with appraisers and understanding every unit in the deal. The challenges are deathly hard, but it got a drop easier with the second deal we did.

Sonnenschein: Understanding the debt piece, the equity piece, the communication and how information is communicated is something that’s as critical as coming up with the business plan. It’s what gives everyone the comfort they need to get into the deal.

Do you have many repeat clients?

Ackerman: We have 50 to 100 clients and they each do a few deals per year. It’s a competitive market and you’re only as good as your last deal. So you can’t let go, there’s always that new broker out there chasing your client.

You said there are less vanilla deals out there; is that clunkiness a function of where we are in the market cycle?

Ackerman: There’s no question that deals are tight and more complex and everything is getting stretched. It’s hard to know where we are in the cycle because it still seems there’s a ton of liquidity in the market. I had dinner with a guy recently who is working on an industrial deal in New York. He had quotes from two brokerage shops. I said give me 24 hours, and I’ll beat whatever you have. I did it. He had 80 percent [leverage]; I got him 85 percent. There’s always a way to get deals done but they are getting tighter and tighter.

Are there any new product types that you’ve ventured into?

Ackerman: It’s been an educational process but we’ve been doing some HUD [Department of Housing and Urban Development]loans recently. We’re refinancing a loan now that the agencies came in at around $31 million, then we got $37 million in HUD money. It’s 35-year money at 4 percent so we’re getting around 20 percent more proceeds at a far cheaper rate locked in for 35 years. It takes six to nine months to close the deal, but it’s great bond-like money.

Sonnenschein: Both Shaya and I have closed HUD loans before. I actually closed a $100 million HUD loan a number of years ago on 16 properties, so I’ve been through the process. It involves a lot of handholding, and you really need to know the process better than the client; otherwise, you’ll have frustration from day one. That great thing in this recent deal was coming up with the HUD solution, walking them through the deal and now closing it and saying, “Hey we got them something they couldn’t anticipate in the beginning.”

Are you seeing more debt fund entrants competing for deals, or has it leveled out?

Ackerman: It’s leveled out the past six to 12 months, but there’s more money than deals. That said there are far fewer for the tough deals and for the bigger deals. I think some guys will get flushed out over the next 12 to 24 months because they’re struggling for product.

Sonnenschein: I think the creativity of the loan structuring comes in to play. The creativity is what’s needed to take what one person will see as two static lenders and figure out a way to merge them and create a loan solution.

Is New York City still a healthy real estate market ?

Ackerman: It still feels healthy. Rents continue to go up and there’s still growth so it still feels like things make sense. It remains to be seen where interest rates go, that could change the playing field.

Sonnenschein: We’re seeing transactions, we’re seeing people continue to buy and there’s a lot of construction going on in the city. When we look at the playing field right now it’s robust and exciting. I think it’s a lot to do with experience. I think we’re smarter than we were 15 years ago. We’re lending smarter, building smarter and buying smarter, and that experience is allowing people to keep transacting.

Ackerman: There are always cycles and always corrections, but corrections create opportunities. Whether it’s in buying properties or deleveraging or restructuring.

Are you seeing lenders favor any particular markets right now, or is it still sponsor and asset-specific?

Ackerman: Still asset and sponsor-specific, I’d say. The easiest asset class [to finance] is multifamily, then office. We’ve done a bunch of industrial and storage deals recently, too.

I actually got a deal last night from the same client who gave me 24 hours to beat his best offer [in another deal]. He said: “I have another situation where a guy came to me and can’t close. He wants me to take over this industrial deal in Florida. You have 24 hrs. Work this out.” And you know what, we’ll get it done. That’s what we do.

You enjoy the challenge?

Ackerman: I love a challenge. You call me up and say, “Beat it and it’s yours”? That’s all you have to say.  I’ll do it.

Sonneschein: We have a good system where Shaya will bring it in and we’ll work to understand it and work through the night getting familiar with it so we have that edge. Every year has been busier than the last and, knock on wood, 2018 will be our busiest year so far. We have big goals and hope to achieve them.

So you’re also challenging yourself to have a better year? I see a trend here.

Ackerman: [Laughs.] Yes! That’s what we do every single year.

The head of a multifamily investment sales team at TerraCRG, Adam Hess, will jump ship to the sales division of Meridian Capital Group, the firm announced.

Hess starts as a senior managing director for Meridian Investment Sales next week. While Meridian already sold more than $1 billion of Brooklyn property in the past two years, the company thinks nabbing Hess—a major player in the multifamily and mixed-used sales in the borough—will bolster its presence in the borough.

“Adam’s tremendous track record and exceptional commitment to client service perfectly align with Meridian’s culture and unique ability to execute in this important market,” Yoni Goodman, the president of Meridian Investment Sales, said in a statement.

Ofer Cohen, the founder and president of TerraCRG, said in a statement that Hess “has been a friend and a colleague for many years,” and added they “wish him the best of luck.”

Hess, born in Rochester, N.Y., started his career as a lawyer but got into the real estate business in 2005 as a broker in Sunset Park for Massey Knakal, as CO previously reported. He joined TerraCRG in 2011 as a partner where he was behind more than $1 billion of sales in Brooklyn, according to TerraCRG’s website.

He primarily focused on neighborhoods in central Brooklyn—like Prospect Lefferts Gardens and Ditmas Park—and has been a major force in the Park Slope sales market; from 2013 to 2016, Hess and his team at TerraCRG were behind more than 40 percent of the sales market in the neighborhood including the $84 million purchase of One Prospect Park and the sale of two buildings on Eighth Avenue to RedSky Capital for $37 million in 2015.

Hess’ hiring is the latest in a series of high-profile pick-ups from Meridian Capital as it hopes to expand its business. Last month, the company hired Adam Hakim and James Murad, former managing directors at Eastern Consolidated, to expand its debt team. Meridian also nabbed Eastern’s James Famularo in June to lead the firm’s new retail division.

New York City-based APF Properties has funded its acquisition of a Midtown East office building with a $182 million financing from LoanCore Capital, according to city property records.

The debt deal, which funded the investment company’s acquisition of 183 Madison Avenue, included $82 million in new mortgages combined with $100 million that was lent by Morgan Stanley to the building’s previous owners, Tishman Speyer and Cogswell Lee Development Group, debt that has now been transferred to new owner. AFP paid $222.5 million for the 19-story tower, twenty percent more than Tishman layed out when it bought the building four years ago.

Meridian Capital Group negotiated the debt.

CBRE‘s Darcy Stacom and Ryan Spector brokered the sale for Tishman Speyer.

“Tishman Speyer and Cogswell Lee’s expert stewardship of 183 Madison Avenue has made it a highly competitive asset in the sought-after Midtown South submarket,” Stacom told Real Estate Weekly when it reported the sale’s closing last week. “It is a great addition to APF’s Manhattan portfolio.”

APF and LoanCore did not immediately respond to inquiries. The Real Deal first reported that the sale was in the works in May.

Tenants at the 275,000-square-foot building, which has stood at the corner of East 34th Street since 1925, include Mundi Westport, the parent company for fashion brands like Nautica and Steve Madden; Spector Group, an architecture firm; and Chantelle, a French lingerie seller.

Midtown’s office leasing market heated up during the first half of the year, according to research from Cushman & Wakefield. In the period from April through June—which is the most recently available data—vacant sublease space fell to the lowest quarterly level in three years. In all, tenants signed up to lease 1.9 million square feet in the neighborhood during 2018’s second quarter, the strongest showing since the beginning of 2014.

Brooklyn-based Galil Management has scored a $103 million CMBS financing package to fund its acquisition of Park 80 West, an office complex 10 miles northwest of Manhattan in Saddle Brook, N.J., according to Fitch Ratings.

The debt, which is to be securitized into the forthcoming BANK 2018-BNK14 commercial mortgage-backed securities transaction, includes a $75.5 senior loan from Wells Fargo that supported provided the majority of the capital for Galil’s $115.5 million acquisition of the 500,000-square-foot property. The seller was a fund affiliated with CBRE that bought the building in early 2015 for an undisclosed sum.

Galil, led by Leibel Lederman, also reeled in $27.6 million in mezzanine and junior financing: a $17.6 million mezzanine piece from an unidentified source, and a $10 million unsecured junior loan from Cimbar Investments.

Meridian Capital Group‘s Abe Hirsch and Matt Texler arranged the financing.

The 10-year fixed-rate Wells Fargo loan earns 4.83 percent interest, with no principal payments until maturity in September 2028. The senior loan balance implies a 65.2 percent loan-to-value ratio, while the lion’s share of the debt thins to LTV to nearly 90 percent.

Park 80 West, at 250 Pehle Avenue in the North Jersey suburb, includes two buildings connected by a walkway, a plaza and parking garages, according to Fitch, which evaluated the forthcoming CMBS deal. The biggest tenants are Rising Pharmaceuticals, New York Life and CBRE, which together take up about a fifth of the complex’s floor space. None of their leases expires within the next five years. Workers at the building get access to a cafeteria and a gym.

During CBRE’s ownership, the real estate company hired architecture firm Gensler to modernize the buildings’ interiors and design a shared lobby for the complex, according to Gensler’s website.

The building earned $11.6 million against expenses of $5.7 million in 2017, which yielded cash flow about 8 percent stronger than the year prior.

Halfway through 2018, occupancy stood at 91 percent, up from 78 percent in 2015. But office vacancies in the property’s submarket, centered around the nearby towns of Hackensack and Teaneck, remain stubbornly elevated. Almost a fifth of the area’s office space is untenanted, according to real estate data provider Reis.

Representatives from Galil and Wells Fargo did not immediately respond to inquiries.

Silvershore Properties has officially closed on the sale of 28 multifamily properties to Delshah Capital for $101.7 million. Delshah secured $88 million in senior and mezzanine acquisition financing from Signature Bank and CCRE, sources told Commercial Observer.

The deal closed late Friday afternoon.

Meridian Capital Group arranged both the sale and the financing. Rich Velotta and Abie Kassin represented both Silvershore and Delshah in the acquisition while Simon Rosenfeld, Rael Gervis and Craig Berger negotiated the debt.

The five-year debt comprises a senior loan with an interest-only component from Signature Bank and a fixed-rate, full-term interest-only mezzanine loan from CCRE, sources said. Officials at Meridian declined to identify or confirm the lenders.

“There were numerous moving parts associated with closing this transaction as it encompassed 28 different properties,” Rosenfeld told CO. “Meridian was able to add value and obtain the required proceeds by pairing an established bank with a favorably priced mezzanine lender. Further, the Meridian team from debt capital markets and investment sales worked seamlessly with both lenders, the borrower and third parties to achieve a streamlined closing.”

The Real Deal first reported that Delshah would purchase the then-unidentified properties for just over $100 million.

CO has learned that the 28 assets are located primarily in Bushwick and Bedford-Stuyvesant, but two assets are located in Downtown Manhattan. The portfolio totals 200,000 gross square feet and includes 210 residential units and 17 retail spaces.

The properties acquired include 808 Prospect Place, a 19-unit building with five commercial spaces in Crown Heights; 219 13th Street, a 25-unit building in Park Slope; and 41 Henry Street, a 20-unit building in the Lower East Side.

“This is highly unique transaction that took an incredible amount of balance and teamwork from all sides to get done,” Velotta said in prepared remarks. “In a market with declining transaction volume, this shows the power of Meridian’s sales and mortgage platform to operate together and perform for our clients.”

Officials at Delshah Capital, Signature Bank and CCRE could not immediately be reached for comment.

Private investor Robert Gans has closed a $148 million refinance for six redevelopment sites totaling more than 1 million square feet in Manhattan and Queens, Commercial Observer has learned.

Bluestone Group affiliate Bluestone Capital led the origination of the $148 million loan and Mack Real Estate Credit Strategies took a senior participation of $130 million.

Meridian Capital Group’s Shaya Ackerman and Shaya Sonnenschein negotiated the three-year bridge loan, which features a rate of 650 basis points over LIBOR. Officials at the brokerage declined to comment on the details of the financing, or to identify the borrower.

Of the four Manhattan properties—whose exact addresses couldn’t be identified by press time—two sites are located in Hell’s Kitchen—one on 11th Avenue between 45th and 46th Streets, one site in West Chelsea and one site is in Soho. The remaining two sites are located in the Astoria and Jamaica neighborhoods of Queens.

Gans controls a portfolio of real estate assets and operating businesses throughout Manhattan. Zoning permits a variety of uses across the portfolio financed, diversifying its potential redevelopment opportunities, sources said.

Bluestone Capital, led by co-founders Eli Tabak and Marc Mendelsohn, has been aggressively expanding its bridge lending platform lately. In January it originated a $109 million bridge loan for Hong Kong Supermarket owner Jeffrey Wu’s building at 41-60 Main Street in Flushing, Queens, as reported by The Real Deal.

And only last week, Mack closed on a $65 million loan for Related Companies‘ acquisition of a Hudson Yards development site 517 West 35th Street.

Gans and officials at Bluestone Group could not immediately be reached for comment. A spokesman for Mack Real Estate declined to comment.

Signature Bank has provided a $40 million loan to refinance three vacant commercial properties in the Financial District owned by the The Moinian Group, Commercial Observer has learned.

The 12-month land loan features two six-month extension options and a prime-based floating rate.

The buildings, at 102-110 John Street, will soon be redeveloped into a 37-story luxury mixed-use tower with an alternate address of 3 Platt Street, New York YIMBY reported in March, with five stories of retail occupying the base of the property.  

The four- and five-story buildings have a total gross square footage of 64,983 square feet.

The development site encompasses 14,229 square feet and has more than 250,000 square feet of development rights.

Meridian Capital Group’s Drew Anderman and Alan Blank negotiated the debt. Officials at the brokerage declined to comment on the lender’s identity.

“This loan was structured with no prepayment penalty, therefore providing maximum flexibility to the borrower as they proceed with their development plans for the site,” Anderman commented in prepared remarks.

Moinian Group also owns the 29-story, 92-unit apartment tower next door at 100 John Street.

Officials at Moinian Group and Signature Bank declined to comment.

Sam Chang’s McSam Hotel Group has nabbed $71 million in construction financing for the development of a Marriott Hotel and a Residence Inn at John F. Kennedy International Airport in Queens, Commercial Observer has learned.

Bank OZK provided the loan, sources familiar with the transaction told CO, which features full term interest-only payments.

Meridian Capital Group’s Adam Hakim and James Murad arranged the debt. The duo joined the brokerage in August from Eastern Consolidated, as first reported by CO. Officials at Meridian declined to confirm the lender’s identity.

McSam Hotel Group is developing the property—at 144-02 135th Avenue in Jamaica, Queens— in partnership with Stamford, Conn.-based Soundview Real Estate Partners and Nashville, Tenn.-based Chartwell Hospitality. The sponsor has owned the development site since 2007.

When completed, two separate hotels totaling 542 rooms will sit atop what is currently a parking lot; a 11-story, 360-key Marriott and a 12-story, 182-key Residence Inn. Both hotels will include meeting spaces, lobby lounges and fitness centers.

McSam Hotel Group has completed over 70 hotels to date, and more in the JFK airport submarket than any other developer.

“McSam Hotel Group continues to be the premier developer of hotels in the New York City market, and this transaction furthers the relationship that the lender has formed with our client,” Hakim said. “This financing will allow McSam and their partners to realize the potential that this site has offered in a market that is in need of new construction hotel product.”

Hakim and Murad also closed $121.4 million in construction financing for McSam’s 45-story, 526-key hotel at 140 West 28th Street in Chelsea in January. Bank OZK provided the $97.5 million senior mortgage in that transaction, too, with Square Mile Capital Management in the $23.9 million mezzanine position.

Officials at McSam Hotel Group did not return a request for comment. Officials at Bank OZK declined to comment.

Naftali Group provided a $13 million mezzanine loan in the $50 million construction financing of Grid Group’s 145 Central Park North, Commercial Observer has learned.

Meridian Capital Group’s Morris Betesh, Michael Homapour and Daniel Belecen negotiated the debt for the South Harlem condominium building, which included $37 million in senior financing from Israel Discount Bank, as previously reported by CO. Officials at the brokerage declined to confirm the lenders’ identities or the senior/mezz breakdown.

The 13-story, 135-foot property will include 37 units with unobstructed views of Central Park. Amenities are set to include a 24-hour doorman, off-street parking, multiple roof decks, resident storage rooms, bike rooms and a gym.

The property joins a host of other condominium developments that have risen in the Central Park North/ South Harlem area, including Artimus Construction’s semicircular property Circa Central Park and Athena Group’s 111 Central Park North.

“Today, condominium construction financing is reserved for the best projects with the strongest sponsors,” Betesh said in prepared remarks. “This property’s unique location overlooking Central Park, with views that will never be blocked, set this development apart and allowed Meridian to arrange competitive financing for a premier developer.”

Grid Group, formerly known as Einhorn Development Group purchased the site at 114 West 110th Street for $16.5 million in November 2013, property records show.

“We believe that uncompromising attention to architectural details and an exceptionally high level of construction execution are integral to both the positive experience of inhabiting the spaces within our projects as well as the long-term value of each building,” Raman Gardner, the director of development for Grid Group, said. “With this unique opportunity at 145 Central Park North, we selected GLUCK+ as the architect and construction manager for the project, knowing they share our objectives of quality and craft above all else.”

A representative for Naftali did not immediately respond to a request for comment.

Madison Realty Capital (MRC) has closed a $258 million loan for an 1161-unit multifamily development portfolio in New Jersey, Commercial Observer can first report.

The debt, provided to Jack Klugmann’s Accurate Builders and Developers of New Jersey, will finance the acquisition and construction of three transit-oriented projects in Bayonne, Raritan and Linden.

“MRC thrives on large, complex transactions like this portfolio and we’re excited to be involved,” Josh Zegen, the co-founder and managing principal of MRC told CO. “We’re financing three major transit-oriented development sites located in different towns, so clearly there are many moving parts, but our experienced team makes complicated deals easy for the borrower and allows them to focus on their core expertise of building. These are prime sites in communities with strong apartment demand based on demographics and transportation connections, and we believe they have great prospects for success.”

Meridian Capital Group’s Shaya Ackerman and Shaya Sonnenschein negotiated the financing.

Harbor Station South—located at the intersection of Goldsborough Drive and Port Terminal Boulevard in Bayonne, N.J—will consist of 651 units spread across two buildings. Its amenities will include a rooftop pool with unobstructed views of the New York City skyline and Bayonnne Golf Course.

The Crossroads at Raritan will sit close to the Raritan Train Station and feature 276 units—of which 20 will be affordable—and its amenities are set to include a bike-sharing program, a virtual yoga studio and a community room.

Details of the Linden project—currently under contract—have yet to be announced. 

“Ultimately, we advised the client to move forward with Madison Realty Capital as they were able to provide a very attractive staged funding, and the flexibility required during construction, which is incredibly important with three properties under development at once. This is a testament to Madison Realty Capital’s experience both as a lender and developer,” Ackerman told CO. “We are excited and proud to work with the Accurate team as they expand into these exciting New Jersey markets by constructing fully-amenitized multifamily rental products that will set the standard for other developments in the area.”

Founded in 2008 by owner and CEO Jack Klugmann, Lakewood, N.J.-based Accurate has an extensive portfolio of New Jersey assets in various stages of development.

“As we expand deeper into New Jersey, it was important to find a lender who truly understands our growth goals and could fully support these developments,” Klugmann said. “Meridian did an excellent job of sourcing a variety of financing options and then facilitating a smooth closing with the team at Madison Realty Capital.”

MRC has been actively lending on development projects in and around New York City. Recent financings include the $100 million upsizing of a construction loan on a seven-building Bedford-Stuyvesant condo complex and a $297 million construction loan for Fortis Property Group‘s River Park—a mixed-use project located at the former Long Island College Hospital site in the Cobble Hill neighborhood of Brooklyn.

Gaia Real Estate secured $31.5 million in financing for its $53 million acquisition of 90 condominium units at Bridge Tower Place from The Brodsky Organization, Commercial Observer has learned.

First Republic Bank provided the five-year condo inventory loan, sources close to the transaction told CO. Officials at the bank declined to comment.

The Real Deal first reported news of the sale.

Meridian Capital Group’s Ronnie Levine and Thomas Wayda arranged the financing.

“It was a pleasure working with Gaia on this acquisition. The loan that we secured provides them with the flexibility they need to maximize the value of the asset while being insulated from near-term increases in interest rates,” Levine said in prepared remarks.

Bridge Tower Place consists of 218 units in total, of which Gaia purchased 90. The 38-story property overlooks the East River; all of its apartments feature floor-to-ceiling windows with river and city views, and some include terraces. Building amenities include a fitness center, a roof deck, a full-service garage, a bike room, and a children’s playroom.

“The Meridian team delivered exactly the financing we were seeking for this asset,” said Danny Fishman of GAIA Real Estate. “It was a pleasure working with them once again.

Andrew Chung’s Innovo Property Group has closed on its $39 million acquisition of 58-30 Grand Avenue—a 151,500-square foot industrial and logistics facility in Maspeth, Queens, Commercial Observer has learned.

The transaction closed late last week.

Pine River Capital Management provided a three-year, $36.8 million full-term interest-only loan in the deal, sources said. A representative for Pine River didn’t immediately respond to a request for comment.

The sale was brokered by Meridian Capital Group’s David Schechtman, Chris Kim, Abie Kassin and Lipa Lieberman while Meridian’s Drew Anderman and Ben Nevid arranged the financing. Officials at Meridian declined to comment.

The Real Deal first reported that Innovo was in contract to purchase the property. Its previous owner, Nathan Indig, put it on the market in March after deciding to relocate his cabinetry business, CNC Associates, to Bedford Stuyvesant in Brooklyn.

The three-story building, erected in 1953, is currently occupied by four tenants with leases expiring between 2018 and 2024, giving Innovo the opportunity to reposition it and capitalize on industrial demand in the area, fed by the decline of industrial inventory in Queens following residential and commercial conversions of existing stock.

The property boasts 16-foot ceilings, 25-foot column spacing and loading docks on the first and second floors.

Maspeth’s access to highways and airports have made it an industrial hub and attractive area for capital investment as a last mile delivery frontier recently. The property’s neighbors include FedEx, UPS Freight and Coca-Cola.

It’s not Innovo’s first industrial bet in Queens; in 2016, the investment firm teamed up with Westbrook Partners to purchase 24-02 49^th Avenue—a seven-story office an industrial property in Long Island City for $196 million. ACORE Capital provided $136 million in financing for the deal, which was also negotiated by Anderman and Nevid.

And the acquisitions are part of a wider investment strategy targeting New York City industrial properties. In September 2017, Innovo and Square Mile Capital Management acquired the defunct Whitestone Multiplex Cinemas site at 2505 Bruckner Boulevard in the Bronx from Extell Development for $75 million. The developers will construct a two-story distribution center at the site by 2020, as previously reported by CO.

Officials at Innovo could not be reached for comment.

Meridian Capital Group announced today that its Institutional Investment Sales Group represented Daishin Securities Co., Ltd. in its acquisition of a trophy office and retail asset located at 400 Madison Avenue. The art-deco property, constructed in the late 1920s, spans the entire block between East 47^th and East 48^th Streets and features boutique floorplates, five private outdoor terraces, exceptional light and air, and an extremely high frontage-to-depth ratio. These characteristics, in combination with the asset’s new tenant lounge, lobby and conference center, offer a highly-sought after “club-like” appeal and atmosphere to office users.

A Meridian team of Helen Hwang, Karen Wiedenmann, Brian Szczapa, Ernie Nichols, and Nicholas Dailey represented the buyer in the transaction.

“400 Madison Avenue presented a rare opportunity to control an entire block-front along one of Manhattan’s preeminent office and retail corridors” said Helen Hwang, Senior Executive Managing Director and Head of Meridian’s Institutional Investment Sales Team. “The significant investment and interest in the area as a result of the Midtown East Rezoning – most notably the recent commitment to the area by JP Morgan Chase & Co – is a testament to what the future holds for this location and asset”

400 Madison Avenue features approximately 6,800 square feet of ground floor retail space that benefits from 200 feet of frontage along the avenue. The property also features a dynamic tenant roster and an unparalleled location: surrounded by all that Midtown Manhattan has to offer and located directly across the street from the North entrance to Grand Central Station. As a result of its location in the heart of Midtown Manhattan, 400 Madison Avenue has a unique ability to draw from both Plaza District and Grand Central District generated office and retail demand.

Helen Hwang, Senior Executive Managing Director of Meridian’s Institutional Investment Sales group can be reached at (212) 468-5930 or hhwang@meridiancapital.com.

Korean financial services firm Daishin Securities nabbed $100 million from Midland National Life Insurance Company to facilitate its $194.5 million purchase of 400 Madison Avenue, which closed on Oct. 24, according to records filed with the New York City Department of Finance.

The $100 million package replaced $51 million in previous debt from J.P. Morgan Chase that was supplied to the building’s seller, ASB Real Estate Investments, in 2015, and it provided an additional $49 million gap mortgage to Daishin. The financing closed in conjunction with the sale on Oct. 24, which was negotiated by Meridian Capital Group.

“400 Madison Avenue presented a rare opportunity to control an entire block-front along one of Manhattan’s preeminent office and retail corridors,” Helen Hwang, a senior executive managing director and head of Meridian’s institutional investment sales team, said at the time of the sale. “The significant investment and interest in the area as a result of the Midtown East Rezoning—most notably the recent commitment to the area by [J.P Morgan Chase]—is a testament to what the future holds for this location and asset.”

Built in 1929, the 21-story, roughly 180,000-square-foot property is located between East 47th and 48th Streets and includes 6,800 square feet of ground-floor retail space.

ASB Real Estate, a division of ASB Capital Management, purchased the property for $139.4 million from the William Macklowe Company in 2012 and moved to refurbish the building.

Upon acquiring the building, ASB improved the facade and its common areas, including refurbishing the lobby and conference center and adding a new tenant lounge in order to provide a “club-like” appeal, according to Hwang.

The property is currently 95 percent leased by 40 tenants, including Knotel, which has leased 25,500 square feet across the third, fourth and seventh floors as well as CitiBank, Kamakura and Bluestone Lane coffee at the ground level, according to information from CoStar Group.

“We took the opportunity to harvest the investment after successfully enhancing the building through our value-add strategy and taking advantage of buyer interest in securing a core asset in a prime Midtown location,” Brodie Ruland, an ASB senior vice president, said in a press release at the time the Daishin sale was announced.

Officials at both Midland and Daishin could not be reached.

A Spanish-Caribbean restaurant, Don Pedro’s, will relocate from Yorkville to the Upper West Side spot formerly occupied by neighborhood mainstay Kefi, Commercial Observer has learned.

Don Pedro’s signed a 15-year lease for 5,000 square feet at Abro Management’s 505 Columbus Avenue between West 84th and West 85th Streets, according to James Famularo and Ben Biberaj of Meridian Capital Group’s Retail Leasing team, who brokered the deal for both sides.

The spot can seat 199 diners and has 2,500 square feet on the ground floor and a 2,500 square foot selling lower level. Asking rent was $400 per square foot.

“It’s a natural fit for the space because there is a void for this type of restaurant in the Upper West Sides restaurant scene close to the American Museum of Natural History and Lincoln Center,” Famularo said in a statement.

Don Pedro’s plans to open on Columbus Avenue early next year. It was previously at 1865 Second Avenue but closed two years ago, according to Famularo.

The eatery will take over from popular Greek restaurant Kefi which closed in June after 11-years in the neighborhood. Kefi later reopened nearby in a smaller space at 222 West 79th Street, Eater New York reported.

Rich Velotta, a managing director at Meridian Investment Sales, is not Harry Houdini. But to many people in commercial real estate, he is a magician: He and his team managed to broker Silvershore Properties’ sale of 28 multifamily buildings to Delshah Capital for $101.7 million, after many other brokerage firms tried to sell parts of the Silvershore portfolio without success. Rich believes, however, that no magic was involved—just a few simple strategies.

Hard Work

Rich, together with his colleague Abie Kassin and their team, started by developing an intimate knowledge of Silvershore’s portfolio, which at the time encompassed around 100 buildings. Information-gathering went far beyond basic research: The team looked closely at dozens of buildings in Brooklyn and two in Manhattan. “I visited over 70 buildings,” Rich recalls. “It was exhausting and took days, but it was the only way we could comprehend the full scope of the portfolio.”

Only after attaining a thorough understanding of the portfolio could the team explain to prospective purchasers why the properties would make a good investment. “I think a lot of brokers who tried to sell pieces of the portfolio just grasped at the opportunity to sell a lot of buildings,” says Rich. “They never did the homework to understand why the properties might be attractive to buyers in the first place.”

Local Expertise

Rich had a head start on this homework, as he’s specialized in the Brooklyn market for years. He has an intimate knowledge of the neighborhoods, relationships with local landlords and management companies, and extensive experience negotiating transactions throughout the borough. These transactions represent a wide variety of property types, from development sites to multifamily and different tax classes, including class 2A and 2B buildings, the categories for many of the Silvershore properties. The capped tax increases of 2A and 2B properties, which Rich recently wrote about in a Commercial Observer article, appeal to a growing number of investors.

Analysis

Analysis followed the information-gathering. “We tried to come up with pricing for as many buildings as possible, and then isolated all the individual properties that were most in line with the pricing expectations of the seller,” Rich explained. “The individual properties vary significantly, so our job was to puzzle together a portfolio that made sense in terms of economies of scale and geography.”

With a package of 28 properties, the portfolio offered the buyer a financially attractive scale, while also helping Silvershore sell as many buildings as possible at the most favorable prices.

Persistence

Because the buildings had been on and off the market for several years, there was a stigma associated with them: They were seen as a “stale” offering. Another challenge was the variation among the properties. “Most investors with $100 million to spend want to buy one building with one deed and one rent roll,” Rich notes. “This deal involved dozens of small buildings, which require far more hands-on management. They all have their own boilers, roofs, and supers. It’s easy to get overwhelmed.”

The complexity didn’t faze Rich and his team. “The biggest reason we were able to get this deal done was that we just didn’t quit,” he says. “When there were difficulties, Abie and I would say, ‘Ok, how do we get over this and figure it out?’ ” He remembers late night phone calls and dozens of meetings, during which the team would negotiate the terms and dollars of every building: “If we could all agree on that $3 million building, chances were that we could agree on five more that were nearly identical to it.”

Teamwork

The team did have one advantage, however, in navigating the deal’s complexity: Co-workers handled the financing. Simon Rosenfeld, Rael Gervis, and Craig Berger of Meridian Capital Group secured $88 million from senior and mezzanine lenders for the purchaser. According to Rich, “With our sales and mortgage teams working in harmony, we were considerably more efficient and more informed than another brokerage would have been. It made the complexities of the transaction easier to deal with.”

Tranquility

Few investment sales brokers in New York City could be described as “calm,” but Rich is an exception. And he believes his demeanor gives him a competitive edge. “I have a mellow attitude,” he says. “In stressful situations where one party is selling its life’s work as a portfolio, and another party is paying $100 million for that portfolio, it’s helpful to have someone around who can keep a level head and stay on an even keel. I advocate a ‘control-what-you-can-control’ mentality and try to be rational in situations that are often very irrational.”

Hard work, local expertise, analysis, persistence, teamwork, and tranquility. These simple steps led to the sale of one of the largest portfolios in Brooklyn over the past decade. No tricks required, but you just might call the result magic.

Rich Velotta, Managing Director at Meridian Investment Sales, can be reached at (212) 468-5924 or richardv@meridiancapital.com

Pi Capital Partners has nabbed a $60M mortgage to refinance construction debt on a new residential building in Queens, Commercial Observer can exclusively report.

The debt comes in the form of a five-year, fixed-rate loan on the building, known as The Elm West, according to Meridian Capital Group, the finance brokerage that arranged the deal. It replaces construction financing from People’s United Bank that dated to 2016. A spokesman for Meridian declined to identify the lender, but a source close to the transaction confirmed that the mortgage is from First Republic Bank.

Meridian’s Cary Pollack and Judah Neuman led the New York City-based debt brokerage’s work on the deal.

Leasing at the retail and residential building, at 85-15 Queens Boulevard in the borough’s Elmhurst section, is set to ramp up in February 2019. When finished, it will include 142 rental units, ranging from studios to two-bedroom apartments, and 25,000 square feet of ground-level storefront space. Forte Preparatory Academy Charter School, an Elmhurst middle school that emphasizes college preparation, has dibs on an additional 30,000 square feet in the seven-story building.

A few blocks west of the Queens Center Mall, The Elm West will face a sister building also developed by Pi Capital, The Elm East, across Broadway. At that building, finished in 2015, a one-bedroom apartment rented last month for $2,299 per month, according to StreetEasy, while a two-bedroom apartment went for $2,899 in August.

Those rates came in slightly above the borough average for monthly rent, which was $2,164 in September, as per a separate report from the real estate website.

A representative for Pi Capital declined to comment, and a First Republic spokesman said the bank typically does not speak to the press about its deals.