1 | MAY 6, 2016

Meadow Partners has received a $200 mil-lion loan to refinance 866 United Nations Plaza, Commercial Observer Finance can

first report. The financing was provided by Mack Real Estate

Credit Strategies. The property is a 477,000-square-foot mixed-use com-mercial condominium in Midtown Manhattan.

As previously reported by COF, Vornado Realty Trust sold the property to Meadow Partners in December 2013 for $200 mil-lion. The transaction was done between

affiliates of MRECS and Meadow Partners—Claros Mortgage Trust and 866 U.N. Plaza Property, respectively.

Offices and retail space comprise the six-sto-ry base of the building, which includes a parking garage below. The residen-tial towers above the sixth floor are not part of MRECS’ collateral. Located di-rectly north of the United Nations campus on East 48th Street, the prop-

erty spans a full city block from East 48th to East 49th Streets between First Avenue and

Fairway Group Holdings, the parent company of Fairway Market, has filed for Chapter 11 bankruptcy protection just three years after filing its initial public offering. The supermarket announced on May 2 that it had reached an agreement with its credi-tors on the terms of a financial restructuring that will rid it of $140 million of senior se-cured debt and also provide financing to help restructure the company’s balance sheet. Fairway’s stock dropped to just 7 cents per share on May 3.

Fairway’s senior lenders agreed to vote in

Fairway... continued on page 3U.N.... continued on page 5

Fairway Files Bankruptcy, Reaches $140M Agreement With Creditors

The LEAD

In This Issue

3 ESRT Lands $50M Life Company Loan on 10 Union Square East5 Bridgeton Holdings Snags $45M Loan for San Francisco Office Building Buy5 Adam America Lands $29M Construction Loan7 Multifamily Property Owner Bags $27M Refi from Greystone7 Square Mile Originates $19M Mezz Loan

“There's financing available in the market for good sponsors and

good projects.” —Michael Maturo

from Q&A on page 11

The Insider’s Weekly Guide to the Commercial Mortgage Industry

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favor of the plan and exchange their loans for common equity plus $84 million of debt of the restructured company. Additionally, the su-permarket has secured $55 million in financ-ing from some of its creditors to assist with its reorganization plans, as well as the post-peti-tion daily operation of its business. The com-pany expects no interruptions to customer service throughout the process, according to the announcement.

Fairway has 15 stores and four Fairway Wines & Spirits stores throughout the Greater New York City metropolitan area. It started as a fresh fruit and vegetable stand at the corner of West 74th Street and Broadway, where its 2131 Broadway store now is, under the name “74th Street Market.” In 1954, it expanded the location to include gourmet and specialty food categories, and renamed the store “Fairway” to convey the concept of fair prices.

In the mid-1970s, the store began trans-forming into a full-service food superstore. “Fairway is famous for apples stacked to the ceiling, olives straight from Italy, New York-style bagels, hand-sliced smoked salmon, prime beef and specialty imports,” said Jack Murphy, the chief executive officer, in the

announcement. “Nobody slices a fish or boils a bagel like us. Nobody.”

Like other supermarket chains, Fairway has faced aggressive competition in New York City from grocery chains such as Trader Joe’s. The Great Atlantic & Pacific Tea Company sold its 11 Food Emporium stores in the Big Apple to other operators

following its parent company’s second bank-ruptcy in July 2015. Then in February of this year, D’Agostino Supermarket announced it would close three stores. Whole Foods, on the other hand, is faring well with eight ac-tive locations around the city and more on the way, as COF previously reported.—Cathy Cunningham

Fairway... continued from page 1

ESRT Lands $50M Life Company Loan on 10 Union Square East

10 Union Square East.

Empire State Realty Trust received a $50 million mortgage from MetLife to refinance 10 Union Square East, the company confirmed to Commercial Observer Finance.

The financing, which closed on March 24, car-ries a 10-year loan with a reduced interest rate of 3.7 percent, from 6 percent, according to the real estate investment trust’s first-quarter earnings report, which was released on April 28. It was not immediately clear who the original lender on the property was.

The collateral is a 58,005-square-foot, fully leased retail condominium on Union Square East between East 14th and East 15th Streets. It is part of Zeckendorf Towers, a mixed-use development that has 670 residential condo units, a 350-seat not-for-profit theater and a 198-space parking garage.

Tenants at 10 Union Square East include Starbucks Coffee, Panera Bread, Food Emporium and Best Buy. The property sits on the east side of Union Square Park and immedi-ately above an entrance to the Union Square sub-way station.

A representative for MetLife did not respond to a request for comment.—Danielle Balbi, with addi-tional reporting provided by Lauren Elkies Schram.

Fairway in Red Hook.

4 | MAY 6, 2016

5 | MAY 6, 2016

Bridgeton Holdings Snags $45M Loan for San Fran Office Buy

New York-based Bridgeton Holdings has secured an acquisition loan from LStar Capital for its $62 million purchase of a San

Francisco office tower, Commercial Observer Finance has learned.

Mission Capital arranged $45 million in non-recourse debt for the purchase of 995 Market Street in the mid-market section of Frisco. The debt brokerage declined to pro-vide terms of the 10-year loan, as well as the identity of the lender.

The 15-story property is anchored by a WeWork, and features a CVS/pharma-cy in the ground-floor retail section of the 91,300-square-foot building.

“The building will be a long-term asset for us, as we continue to amass strategic prop-erties in transitioning markets that have improving neighborhood dynamics and strong supply and demand fundamentals,” Atit Jariwala, the chief executive officer of Bridgeton Holdings, said in a Mission Capital press release.

Jordan Ray, Ari Hirt, Steven Buchwald and Alex Draganiuk of Mission Capital arranged the loan on behalf of Bridgeton Holdings, which also has offices in San

Francisco and St. Louis.The borrower was looking for a finance

package that kept it free of defeasance or yield maintenance that would have resulted in a prepayment penalty, Mr. Hirt said in the release. A financing deal had to close within 50 days, because the sale was done as a 1031 exchange, he added.

“Through a strong marketing effort, we were able to secure an extremely competitive offer from a lender that recognized the asset’s long-term value,” he said in a statement. “We ultimately closed the loan within the 50-day window, while fulfilling the terms that the borrower needed.”

Seattle-based Columbia Pacific Advisors and San Francisco-based Long Market Property Partners put the property, also known as the David Hewes Building, on the market in October 2015, according to The Registry, a Bay Area real estate publication. The expected $60 million sales price for the structure was a major boost from the $16 mil-lion the partnership paid for the property in 2013, the paper noted.

A representative from LStar Capital did not return a request for comment.—Terence Cullen 995 Market Street.

Adam America Lands $29M Construction Loan for W’burg Multifamily

CapitalSource has provided Adam America Real Estate with a $29 million con-struction loan for the development of a 38-

unit multifamily property in Williamsburg, Brooklyn, Commercial Observer

Finance has learned.The seven-story development, located at

308 North 7th Street, will comprise 38 res-idential condominium units. Building ameni-ties will include a fitness center, a courtyard and a rooftop common area with views of Manhattan and Brooklyn.

Aaron Appel and Keith Kurland in JLL’s real estate investment banking group arranged the financing for the transaction.

“Williamsburg continues to see huge growth as it becomes more attractive to residential buyers,” Mr. Appel said in prepared remarks to COF. “With condominium units compris-ing just 8 percent of Brooklyn’s total develop-ment pipeline, this multifamily asset is primed to deliver solid yields,” he said.

Representatives for Adam America did not respond to requests for comment, nor did of-ficials at CapitalSource.—Cathy Cunningham View of Williamsburg.

the Franklin D. Roosevelt East River Drive, and has 360-degree views of the U.N., the Secretariat Building and the East River.

MRECS has been a very active lender in New York City, completing around $1 billion in lend-ing last year—an amount it aims to double in

2016, according to sources close to the transac-tion. As previously reported by COF, the lender closed three loans for $70 million, $200 mil-lion and $51.2 million to Elie Tahari, Kuafu Properties and a joint venture between Lincoln Property Management and Alcion Ventures, respectively, in October 2015 alone.

To date, 866 U.N. Plaza has experienced strong sales momentum, with demand driven by sovereign missions that require close prox-imity to the U.N. campus.

Officials at MRECS and Meadow Partners did not return requests for comment.—Cathy Cunningham

U.N.... continued from page 1

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San Francisco Multifamily Property Owner Bags $27M Refi From Greystone

Greystone has provided a $27 million Fannie Mae multifamily affordable hous-ing loan for the refinancing of Glenridge

Cooperative Apartments in San Francisco, Calif., Commercial Observer

Finance has first learned.The multi-building, two- and three-story

apartment complex is owned by Glenridge Apartments Residential Council and locat-ed at 137 Addison Street in the Glen Park/Diamond Heights area of San Francisco. It fea-tures 275 units, 75 percent of which are under U.S Department of Housing and Urban Development’s Section 8 rental assistance program.

Jeff Stiel, a vice president in Greystone’s New York office, originated the MAH loan, which carries a 30-year term with a 30-year amortizing structure and will be used by the property owner to pay off existing debt under two separate HUD loans, as well as providing funds for renovations.

“We knew the Fannie Mae affordable proj-ect would work for the GARCI board as it would allow them to obtain proceeds for man-datory state-compliant repairs in addition to

meeting their financing requirements,” said Joe Mosley, the head of agency lending at Greystone, in prepared remarks.

“Our property had atypical land use re-strictions from our existing HUD loan that Greystone was able to evaluate and work with Fannie Mae [on] to get the loan funded,”

said Fred Butler, GARCI’s board president, in a statement. “This loan will allow us to continue to provide real affordable housing to both low- and moderate-income families in a city that has one of the highest residen-tial rental costs in the country,” he said.—Cathy Cunningham

Glenridge Cooperative Apartments at 137 Addison Street in San Francisco, Calif.

Square Mile Originates $19M Mezz Loan for W’burg Mixed-Use Refi

Brooklyn-based RedSky Capital has re-ceived a $19 million loan from Square Mile Capital Management to refinance debt on

a mixed-use property in Williamsburg, Commercial Observer Finance has first

learned. The loan has a three-year term.The 74,370-square-foot property is locat-

ed at 241 Bedford Avenue. Constructed in 1930, the two-story structure comprises 48,860 square feet of retail space and 27 res-idential rental units. The loan will be used to fund the renovations of the retail space, re-tail leasing and alterations to the second-floor apartments.

Retail tenants include Umami Burger, Foodtown, Sweetgreen and vegan eatery by CHLOE. RedSky Capital is Williamsburg’s largest retail landlord, with multiple holdings along Bedford Avenue, Metropolitan Avenue, Roebling Street and North 6th Street.

“This transaction was an exciting opportuni-ty to provide financing for an asset strategically

located in a prime Williamsburg location, while also enabling us to establish a relationship with Williamsburg’s most active retail landlord,” Square Mile Principal Matthew Drummond said in prepared remarks. “With the strong and continued growth in Williamsburg’s retail and multifamily markets, as well as this property’s

central location at the heart of Williamsburg’s recent commercial activity, we feel that the asset has tremendous potential and is well-po-sitioned for continued success as major retail-ers continue to expand into the neighborhood.”

A spokeswoman for RedSky declined to com-ment on the transaction.—Cathy Cunningham

241 Bedford Avenue.

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“As the market marches through 2016, there is still a plethora of maturing loans left to be refinanced,” said Sean Barrie, an analyst with Trepp. “Through the first four months of 2016, a little over $4.2 billion of the remaining maturing total belong to loans backed by industrial properties. More than 25 percent of the maturing industrial total is tied up in the six largest industrial loans coming due this year. At the top of the heap is the RREEF national Industrial Portfolio, totaling $250 million. With a current loan-to-value ratio and debt service coverage ratio of 52.5 percent and 2.05 percent respectively, the portfolio shouldn’t encounter much difficulty in finding a payoff method. Conversely, the $197.3 million Schron national Industrial Portfolio is currently with the lender and sporting a 351.92 percent LTV and 0.07 DSCR.”

Source:

The Takeaway

Industrial Loans Maturing in 2016

COMMERCIALOBSERVER.COM

Property NameCurrent Loan Balance

Maturity Date

Current LTVCur-rent DSCR

Delinquency Status

City State Deal Name

RREEF Industrial Portfolio

$250,000,000 Dec. 15 52.50 2.05 Current Various Various MSC 2006-IQ12

Schron Industrial Portfolio

$197,308,669 May 10 351.92 0.07 REO Various Various GCCFC 2005-GG5

Americold Portfolio $194,000,000 Dec. 15 80.00 0.89 Current Various Various JPMCC 2006-LDP9

Duke Realty Industrial Pool

$159,488,000 Nov. 15 80.00 1.45 Current Various Various WBCMT 2006-C29

Duke Realty Industrial Pool

$159,488,000 Nov. 15 80.00 1.39 Current Various Various WBCMT 2006-C29

Americold Portfolio $115,300,000 Dec. 15 74.20 0.87 Current Various Various JPMCC 2007-LD11

REPM Portfolio $81,853,363 June 12 160.10 1.04 Foreclosure Various Various JPMCC 2006-CB16

Americold Pool 1 $65,700,000 Dec. 15 79.30 1.12 Current Various Various JPMCC 2007-LDPX

The Dallas Design District

$58,800,000 Nov. 15 59.20 3.43 Current Dallas Texas JPMCC 2015-FL7

DHL Center $55,850,000 May 15 129.95 1.36 Foreclosure Breinigsville Pa. LBUBS 2006-C1

Space Park $50,123,714 Dec. 15 67.90 1.41 Current Santa Clara Calif. CSMC 2006-C5

First Industrial Portfolio $47,497,721 May 11 104.47 0.79 Current Various Ga. BSCMS 2006-PW13

333 North Bedford Road $40,755,121 Aug. 10 55.92 1.845 Current Mount Kisco

N.Y. UBSC 2011-C1

Verio Building $36,498,227 Nov. 15 70.20 1.49 Current San Jose Calif. CSMC 2006-C5

Crossroads Technology Park

$35,000,000 Nov. 15 59.93 1.11 Current Union City Calif. WBCMT 2006-C29

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Q+A

Commercial Observer: How did you get into the industry?

Mr. Maturo: [In 1983] I started with a firm called Kenneth Leventhal & Company, which was a real estate consulting and au-diting firm. It had a very boutique-type of service and catered solely to real estate busi-nesses. It was interesting in that the projects were very unique, ranging from understand-ing and helping people with development, to helping developers and operators through the workout environment. It was also fo-cused on working on large projects, financial structuring and tax structuring, and provid-ing audit and tax services to those real estate clients. I learned a lot about real estate there for 10 years or so. Then we merged with Ernst & Young, and it became EY Kenneth Leventhal for a number of years.

So how did you meet Scott Rechler, the chairman and chief executive offi-cer at RXR?

When Scott was doing his [initial pub-lic offering for Reckson Associates Realty Corp.], I had been working on a number of [real estate investment trust] initial public offerings in the early 1990s. Scott started his IPO in late 1994 and closed at the beginning of 1995. In December of 1994, he contacted me through an investment banker about be-coming his CFO—being the first non-family member to come into the executive ranks. I had dinner with him, his wife and my wife, and we hit it off pretty quickly. I decided, long-term career-wise, I wanted to get on the investment side. We worked together over the years to build a public company, ag-gressively grew it throughout the tri-state area and then into Manhattan and then ex-panded aggressively within Manhattan. We wound up selling the business to SL Green [Realty Corp.] for over $6 billion. Then we quickly formed RXR, and we’ve been rais-ing private capital ever since. And that’s how we fund ourselves—with funds, co-in-vestments, joint ventures. So we’ve raised al-most $6 billion since we formed RXR, and we’ve acquired about $15 billion of assets and expanded the company.

How many funds does RXR have?Right now we have four funds. Our first

fund was $250 million—with co-investment and separate account equity that number is proba-bly around $2 billion of equity. Our second fund was $500 million, and we’re fully committed in that fund, with co-invest and separate accounts there’s roughly $2.5 billion of equity. We’ve raised a $300 million emerging-submarket fund, [which is used to] invest in the boroughs and urban-suburban markets. And now we’re raising our latest fund—a value-added fund—between $1 billion and $1.5 billion, and [so far] we’ve closed about $600 million.

On the commercial side, we’re doing a lot of redevelopment: 75 Rockefeller Plaza is a big redevelopment; we did a big redevelopment at 237 Park Avenue; and then obviously Pier 57 is a major redevelopment.

A lot of people have been saying that it’s difficult to get construction financing, given where we are in the cycle. What was the market’s reception to financing the Pier 57 deal?

I think there’s financing available in the mar-ket for good sponsors and good projects, and I think what’s most important is that you have to demonstrate to lenders that you have a so-phisticated, deep infrastructure and a proven ability to execute.—Danielle Balbi

Michael MaturoPresident and Chief Financial Officer at RXR Realty

Michael Maturo.

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