February – Briefs/Finance

KKR Raises $1.5B for First Real Estate Fund; Vornado Refinances Eleven Penn Plaza for $450M; CBRE Arranges $72M Refinance for Retail Portfolio; HFF Secures $40M for Retail Outlet on U.S.-Mexico Border; Madison Closes $38M for Hospital Redevelopment; NorthMarq Arranges $89M for Trio of California Apartments; New Boston Fund, Asian CDC Land $115M for Mixed-Income Project; JLL Secures $186M for East Coast Hotel Portfolio Acquisition; Meridian Capital Arranges $160M for Manhattan Office Asset.

KKR Raises $1.5B for First Real Estate Fund

Strong interest from a variety of investors helped KKR amass $1.5 billion for its first real estate fund in only six months. The KKR Real Estate Partners Americas L.P. fund is now closed and the global investment firm is continuing to put the money to work. KKR began soliciting third-party capital for the fund in the second quarter of 2013. The firm raised $1.2 billion from investors and added $300 million in commitments from KKR personnel and KKR Financial Holdings L.L.C. The fund will continue to target property-level equity, debt, special situations transactions and businesses with significant real estate holdings in North America and Western Europe.

Vornado Refinances Eleven Penn Plaza for $450M

Vornado Realty Trust has completed the $450 million refinancing of Eleven Penn Plaza, a 1.1 million-square-foot Manhattan office building located across the street from Penn Station. The seven-year loan is interest-only at 9.95 percent. Vornado realized net proceeds of approximately $107 million after repaying the existing loan on the asset and closing costs. The REIT currently has a portfolio comprising 342 properties with more than 73.2 million square feet of space.

CBRE Arranges $72M Refinance for Retail Portfolio

CBRE Group Inc.’s Debt & Equity Finance group has arranged $72 million to refinance an 18-property retail portfolio in Florida and Georgia owned by Olympia Development Group. The funding came via three loans originated by Rialto Mortgage Finance L.L.C. The transaction allowed Olympia to refinance and extend its non-recourse position in all 18 properties through a single transaction for another five years at a high loan-to-value ratio and a low fixed-interest rate of 5.02 percent. All but one of the properties are retail oriented. The portfolio comprised 12 Walgreens; a Publix shopping center; a small office complex; a free-standing Applebee’s, Dunkin Donuts and Anytime Fitness; and the historic Safety Harbor Resort and Spa.

HFF Secures $40M for Retail Outlet on U.S.-Mexico Border

HFF has secured $40 million in financing for the development of a 140,000-square-foot outlet center along the U.S.-Mexico border in San Ysidro, Calif. The Shamrock Group L.L.C. will develop the retail asset known as The Outlets on the Border. The financing was placed with Canyon Capital Realty Advisors. Completion is slated for October 2014. The location benefits from a serious amount of foot traffic as it is adjacent to the busiest border crossing in the world, with approximately 100 million crossings per year—including more than 26 million pedestrians. The outlet project is the final phase of the Las Americas Master Plan, which includes the development of 800,000 square feet of retail space.

Madison Closes $38M for Hospital Redevelopment

Madison Realty Capital has closed a $38 million first-mortgage bridge loan for the acquisition of the former St. John’s Queens Hospital building in Elmhurst, N.Y. The new funding facilitates the buyer’s plan to redevelop the 266,322-square-foot medical facility, which has been closed since the former operator went bankrupt in 2009. The new ownership is a group of primarily Chinese investors led by developer Steve Wu.

NorthMarq Arranges $89M for Trio of California Apartments

NorthMarq’s San Francisco office has secured $89.1 million for three apartment properties in California. Financing for the The Boulders, Chesapeake Point and Los Robles Apartments was structured with 10-year terms and 30-year amortization schedules. NorthMarq arranged the financing through its relationship with The Guardian Life Insurance Company of America. The three assets total 512 units and are owned by Prometheus. 

New Boston Fund, Asian CDC Land $115M for Mixed-Income Project

New Boston Fund Inc. and Asian Community Development Corp. are one step closer to making their 362-unit mixed-income project in Boston’s Chinatown neighborhood a reality, thanks to $114.7 million in financing arranged by HFF. The partnership landed $104 million through PNC Bank, People’s United Bank and Boston Private Bank & Trust for the asset known as One Greenway. HFF also arranged a $10.7 million equity investment by National Real Estate Advisors. When completed in the summer of 2015, One Greenway’s North Building will consist of a 21-story, 217-unit market-rate rental tower; a 10-story, mid-rise portion with 95 affordable-rate rental units; a 135-space, below-grade parking garage; and approximately 3,300 square feet of retail and 5,000 square feet of community space. The South Building, to be built in a subsequent phase, will contain 50 affordable condominiums.

JLL Secures $186M for East Coast Hotel Portfolio Acquisition

Jones Lang LaSalle Inc. has secured $186 million in acquisition financing for Blackstone Real Estate Advisors’ purchase of a 15-property hotel portfolio. Deutsche Bank provided the five-year, floating-rate loan. The portfolio features 1,642 keys that are located in Pennsylvania, New York, North Carolina, New Jersey, Rhode Island, Connecticut and Delaware. JLL executive managing director Peter Nicoletti and managing director Mathew Comfort, along with executive vice presidents Dustin Stolly and Bill Grice, led the JLL team on the transaction.

Meridian Capital Arranges $160M for Manhattan Office Asset

An entity controlled by RFR Realty has landed a $160 million loan for 980 Madison Ave. in New York. Meridian Capital negotiated the financing, which was provided by a syndicate of three banks. Terms included a fixed rate of 4.13 percent and a three-year extension option. The six-story, 131,000-square-foot office property is located at the corner of Madison Avenue and 76th Street. Gagosian Gallery is the anchor tenant. Sotheby’s called the space home in the mid-1960s.