the mortgage observer october 2012

The Insider’s Monthly Guide to New York’s Commercial Mortgage Industry October 2012

Q&A The M.O. talks about the future of securitization with Savills’s

Je� rey Baker

Banking on the CommunityPOWER PROFILE

JASON PENDERGISTCHASE COMMERCIAL TERM LENDING BULKS UP EAST

15 Central Park WestMorgan Stanley Provides$125 Million Loan for Retail Unit The Homestead ResortCushman & Wakefi eldArranges Financing Down South

450 Lexington AvenueHow RXR Completed Its Purchase of the Tower

Maximize It!DebtX on Maximizing Non-Performing Loan Sales

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Carl Gaines Editor

Jotham Sederstrom Editorial Director

Alessia Pirolo Staff Writer

Sam Chandan Joshua Stein

Columnists

Michael Stoler Contributor

Noam S. Cohen Copy Editor

Barbara Ginsburg Shapiro Associate Publisher

Robyn Reiss Director of Real Estate

Ed Johnson Production and Creative Director

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Jared Kushner Publisher

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October 2012 / Contents

Editor’s Letter 02

News Exchange 04Mortgage originations, note sales, investments, industry research Morgan Stanley Provides Loan on 15 Central Park West Retail Unit Strategic Hotels Closes on Essex House Hotel Purchase RXR Completes 450 Lexington Buy Accordia Realty Refinances Two Properties

Q&A 12Jeffrey Baker of Savillsby Carl Gaines

Scheme of Things 14Monthly charts of commercial real estate financings in the boroughs

Stein’s Law 16Quicker and Cheaper Loan Closings? by Joshua Stein

The Basis Point 17The (Sorry) State of Construction Lending by Sam Chandan

Workforce 18Hirings, promotions, defections and appointments

Power Profile 20Chase Commercial Term Lending Bulks Up East by Carl Gaines

Good Deeds 24Banking on the Communityby Alessia Pirolo

Culture 28Apps to Watch, BlackBerry vs. iPhone, Map wars!

The Sked: October 30Our picks for the month’s must-attend events

Of Interest 32An index of all the people, places, addresses and companies mentioned in this issue

Cover Photo by Michael Nagle

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2

Editor’s Letter / October 2012

Writing about commercial real estate, I get to visit some amazing buildings throughout New York City while reporting. The preparation for this month’s issue was no exception and found me staring out of a window on the 49th floor of JPMorgan Chase’s offices at 270 Park Avenue.

I was there to meet with Jason Pendergist, who heads commercial term lending for the bank’s eastern region. Jason pointed out how helping to train athletes at the University of Colorado at Boulder had translated to managing a team of bankers. I enjoyed meeting him and learning about his lending philosophy, and it was great to get a bird’s-eye view of two Extell Development projects, One57 and the International Gem Tower, which were rising nearby. I must have been distracted, because I dropped a sterling silver salt shaker on my plate, which promptly cracked. Regardless, I look forward to meeting again with Jason at the NYC Real Estate Expo on October 18 at Columbia University. I’ll be moderating a panel he’s speaking on and will try not to break anything.

The “Banking on the Community” feature this month was written by Alessia Pirolo, a new staff writer for The Mortgage Observer, whom I’d like to welcome. Alessia, who was most recently a freelancer for The Wall Street Journal, will also be writing for a weekly, emailed newsletter we’re launching this month. Please email me at [email protected] if you’d like to be added to the list for this exciting newsletter, which will cover commercial real estate financing news and deals both in New York City and elsewhere around the country.

For our November issue, we’re featuring a list of the top 20 commercial mortgage brokers under 35. We’ll be accepting nominations for this list of rising stars until October 8, so please send your nominations.

Carl Gaines, Editor

Banking on the Future

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OriginatiOnsnews Exchange / October 2012

Morgan stanley Provides Loan on 15 Central Park West retail Unit

RXR Completes 450 Lexington Buy

» On the heels of purchasing the mezzanine debt on 450 Lexington Avenue, RXR Realty has com-pleted its acquisition of the building from Istithmar World, the Dubai-based investment firm.

The company also initiated a rent reset with the building’s largest tenant—law firm Davis Polk & Wardwell—that will keep the firm in place in its 650,000 square feet there for 15 years. Other tenants there include Warburg Pincus and Morgan Stanley Smith Barney.

RXR president and chief financial officer Michael Maturo told The Mortgage Observer that the $300 million mezzanine loan secured by the building was purchased, though over a period of time.

“We bought it in two pieces,” Mr. Maturo said. “One was about 18 months ago, and the second was within the last six months.” He said that this was the entire capital stack outside of the equity, before an in-place capitalization.

The new debt on the 910,473-square-foot, 40-sto-ry tower is a $325 million senior mortgage, though Mr. Maturo said that he couldn’t comment on the terms of this new piece of financing.

“The building is in incredible condition and sub-stantially leased—so there’s not a lot to do, to be hon-est,” Mr. Maturo said, when asked about RXR’s plans for the acquisition.

“This was a very complex transaction that was two years in the making,” said Scott Rechler, chairman and CEO of RXR. “It further demonstrates our con-tinuing commitment to and belief in the New York City market, where we have acquired over 5 million square feet of space in the past 24 months.”

Those recent acquisitions Mr. Rechler referenced include 620 Avenue of the Americas, which RXR took full ownership of in late 2011, and the Starrett-Lehigh Building—bought in the summer of 2011.

Strategic Hotels & Resorts Closes on Essex House Hotel Purchase

» Chicago-based luxury hotel group Strategic Hotels & Resorts has closed on its $362.3 million re-acquisition of the JW Marriott Essex House Hotel.

Strategic Hotels teamed up with an affiliate of KSL Capital Partners, a private equity firm, to help fi-nance a part of the purchase. Strategic Hotels, led by hospitality veteran Laurence Geller, will receive a 51 percent ownership stake in the Essex House Hotel and will serve as the managing member and asset manager of the property.

The final purchase price equals $685,000 per

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» Morgan Stanley has provided a $125 million mortgage on the retail portion of 15 Central Park West, the luxury condo where Goldman Sachs CEO Lloyd Blankfein and many other influential bankers live, The Mortgage Observer has learned.

The tower, designed by the architect Robert A.M. Stern, owes its fame to apartments sold for record-breaking sums of money. Most recently, a Russian tycoon bought a penthouse for $88 million. The de-velopers, Arthur and William Lie Zeckendorf, have maintained ownership of the retail space on the ground floor through a controlled company. Among the tenants are Best Buy and West Elm.

Morgan Stanley provided a new loan on the prop-erty for $9 million that was consolidated with the previous mortgage to form a single lien of $125 mil-lion, according to public records.

In 2007 the German bank Eurohypo provided a first mortgage loan on the property for $140 mil-lion. After the Eurozone crisis hit, though, the bank decided to unload loans on its U.S. properties. Last

May, Wells Fargo and Blackstone purchased loans from Eurohypo on 14 properties between New York, Boston and Miami for a total value of $740 million. Wells Fargo agreed to purchase the loan on the re-tail component of 15 Central Park West, among oth-ers. Recently, Wells Fargo transferred the mortgage to Morgan Stanley.

A representative for Wells Fargo confirmed to The Mortgage Observer that the bank is no longer in-volved in this loan. Morgan Stanley declined to com-ment for this story.

Several Morgan Stanley bankers will be able to keep a very close eye on this financing. “Four pres-ent or former Morgan Stanley executive were among the initial purchasers” of 15 Central Park West apart-ments, said real estate author Michael Gross, who is currently writing a book on the building. Morgan Stanley executives were “outnumbered only by ex-ecutives of Goldman Sachs—which financed the building—and the defunct Lehman Brothers,” Mr. Gross added.

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October 2012 / News Exchange

unit in the 518-key hotel.DIG EH Hotel LLC (Dubai Investment Group), the

seller of the Essex House Hotel, was advised by a Morrison & Foerster team of Mark Edelstein, Jef-frey Temple, Keith Print and James Pincow.

The KSL Capital Partners-Strategic Hotels part-nership also secured a $190 million first mortgage from Bank of America “to fund the balance of the purchase price,” according to a press release an-nouncing the deal’s closing.

The three-year loan, which comes with the option of two one-year extensions, will “bear interest at LI-BOR plus 400 basis points, with a LIBOR floor of 75 basis points,” according to an earlier press release.

The 81-year-old hotel on Central Park South will also undergo a capital improvement program valued at $18.3 million to help distinguish it “under the JW Marriott flag.”

A spokeswoman for Strategic Hotels said that the hotel was unbranded before the acquisition.

In closing the hotel, Strategic Hotels signed a 50-year management deal with Marriott Internation-al to rebrand the hotel as JW Marriott Essex House Hotel. In its agreement with Strategic Hotels, Mar-riott guaranteed a net operating income of $21.5 million a year for 8 years.

DIG EH Hotel LLC, or the “Dubai Investment Group,” purchased the Essex House Hotel from an affiliate of Strategic Hotels in 2005 for $440 million.

Mr. Geller was not immediately available for com-ment. A spokesman for Morrison did not immedi-ately respond to a request for comment.

PNC Funds Phase Two of Middletown Project to Tune of $27 Million

» Mark Scott’s Commercial Mortgage Capital has arranged a $27 million loan to finance the sec-ond phase of construction at an apartment com-plex in Middletown, N.Y.

The financing was through PNC Bank and will allow for the construction of an additional 120 units and retail space at Sterling Parc, which is lo-cated in the Hudson Valley. PNC also funded phase one of the complex, which will number 192 units in all.

Mark Scott told The Mortgage Observer that this most recent deal comes on the heels of his busiest summer yet, as borrowers race to lock in unheard-of rates.

“People want to lock down rates for not just 10 years, but sometimes 15 years or longer, even though the pricing might be higher,” Mr. Scott said, adding that borrowers that wouldn’t fathom

absorbing a pre-penalty are doing it because of the rate environment. “Those two things are in the backdrop of something else that I’m hearing from borrowers. And that is that they feel that they bet-ter tie it down in the next 60 days or so because they’re waiting for the next shoe to drop.”

What exactly that “shoe” is runs the gamut, from the results of the pending U.S. presidential election to Israeli strikes against Iran. Regardless, Mr. Scott said, “Borrowers are just feeling the need and desire to tie things down now.”

In this case, the property’s owner, Sterling Prop-erties of New Jersey, was able to tie down a loan at a sub 3 percent rate for three years, interest only. Mr. Scott said that the “$27 million absorbed the existing $8 million” loan on the project.

Construction on phase two of Sterling Parc has already started, and the units are expected to de-liver over the next 18 months.

With his busiest summer nearly over, Mr. Scott said that he anticipates staying busy. “The pipeline is full of multifamily construction deals,” he said of upcoming deal volume, “and there are still a lot of fixed-rate, permanent opportunities out there.”

Accordia Realty Refinances Two Properties

» New Jersey-based Accordia Realty Ventures LLC has announced the complete refinancing of the first mortgage loans on two of its office buildings, which it has owned for over five years.

The properties are Greenbrook Executive Center, a 200,000-square-foot Class A building located at 100 Passaic Avenue in Fairfield, N.J., and River Drive Center II, an 83,000-square-foot building located at 669 River Drive in Elmwood Park, N.J.

Accordia Realty declined to provide details on the amount of the loans, but it confirmed that Lakeland Bank has fully refinanced a first mortgage loan on Greenbrook Executive Center, which, according to public records, was $21.3 million in September 2006. The property was purchased for $31.9 million.

Accordia Realty principal Joseph Romano told The Mortgage Observer that the company has in-vested about $5 million in renovations to the build-ing. In 2006, the occupancy rate was approximately 85 percent. In the last few years, despite having lost a large tenant, the company executed seven new lease agreements and boosted occupancy back to approx-imately 90 percent. Among the most recent tenants to sign a lease is entrepreneur Jason Cohen’s Rick-land Orchards, a newly launched firm of healthy Greek yogurt food products.

Mr. Romano added that Accordia Realty is in the process of finalizing leases at River Drive Center II, bringing the occupancy rate of that building to

approximately 80 percent from a previous 65 per-cent. Accordia Realty bought the office building in January 2007 for $11.9 million. Now Allstate Life Insurance Company has renewed its loan on the property.

“We have been very successful with our refi-nancing efforts in large part due to our long-term relationships,” Mr. Romano said in a prepared state-ment. “The lending community recognizes the qual-ity behind Accordia Realty assets—the very positive leasing velocity, the high-level management and maintained value demonstrated at our properties.”

“In turn, with our successful refinancing, Accordia Realty is in acquisition mode seeking office, indus-trial, retail and development projects in the tri-state area,” added Accordia Realty principal Jason Boga-rt. The company is currently looking at properties in Westchester, N.Y., Connecticut and Pennsylvania.

Hudson Funds Class B Downtown Brooklyn Building for $9.1 Million

» Hudson Realty Capital has funded a $9.1 million first mortgage secured by a Downtown Brooklyn of-fice building. The loan will be used by the sponsor to lease up the 90,000-square-foot, Class B office building and to convert portions of it into executive office suites.

The building, at 540 Atlantic Avenue, is in a prime spot, given recent activity and developments in the area. It sits one block away from a major transporta-tion hub, Atlantic Terminal, and two yards from the Atlantic Yards, where Jay Z has already sold out a se-ries of concerts at the Barclays Center.

“Although this particular loan had several mov-ing parts, it is an attractive transaction for Hud-son because of the neighborhood, which we know well,” said Hudson Realty Capital managing direc-tor Spencer Garfield. “And it is a market where the sponsor has developed and/or managed several oth-er successful projects, ranging from ground-up con-struction to purchase and rehab.”

Financing in Place for 50 East 69th Street

» Massey Knakal Capital Services recently ar-ranged an $8 million, non-recourse loan for an ambulatory surgical center at 50 East 69th Street, between Park and Madison avenues, managing di-rector Garrett Thelander confirmed to The Mort-gage Observer.

The building, which is an over 20,000-square-foot landmarked mansion on the Upper East


6

News Exchange / October 2012

ElsEwhErE...Side, was built in the early 20th century as a family house.

In 1979, the plastic and reconstructive surgeon James W. Smith bought it and converted it to medical offices and operating rooms. Since 1988, Dr. Smith’s Center for Specialty Care has been the only tenant in the building. Currently, it holds a five-year lease, according to Massey Knakal.

On the current residential market, the man-sion might reach a value of around $40 million, said Massey Knakal Capital Services director Morris Betesh. “The $8 million refinanced an existing balance of approximately $6.5 million,” Mr. Betesh said. Excess proceeds from the loan fi-nanced new medical equipment and building up-grades, he added.

The lender was People’s United Bank, accord-ing to public records. The loan was fixed for 10 years at 3 percent, with the first two years inter-est-only. The new interest rate on the loan was over 4 percent less than the prior rate.

Meridian Arranges $13M Loan for Flatbush Retail

» Meridian Capital Group has arranged a $13 million loan for a 35,000-square-foot strip of re-tail buildings at 1875-1925 Nostrand Avenue in the Flatbush section of Brooklyn. The loan, financed by a local community bank, permitted an entity controlled by real estate investors Isaac and Billy Shalom to close the purchase of the property, The Mortgage Observer has learned.

The previous owner, real estate investment company Emmes Asset Management, sold the building to the Shalom brothers for $18.5 million, or about $544 per square foot, according to pub-lic records.

The property, located between Foster and Newkirk avenues, consists of a 400-foot strip of 14 one-story buildings. The retail spaces are 100 per-cent occupied, with tenants including a Key Foods supermarket, Papa John’s Pizza and Subway fran-chises and “mom and pop” stores.

Meridian Capital Group confirmed to The Mort-gage Observer that “the very high density” of the Flatbush area and the fact that the property is sur-rounded by multifamily buildings made the deal very appealing for the buyers.

The loan has been arranged by Meridian Capital Group executive vice president Avi Weinstock and managing director Moshe Majeski.

ritzy Virginia resort Becoming More so, Thanks to Financing Arranged by Cushman & wakefield

» The Homestead, a luxury resort nestled on 3,000 acres in western Virginia, is about to up its luxury quotient thanks to a $30 million loan from a southern bank.

A team from Cushman & Wakefield arranged the financing for the KSL Capital Partners-owned resort via BB&T. KSL Capital Partners manag-es nine resorts through its KSL Resorts affiliate. Some of them, like the Homestead, are owned by funds that KSL Capital Partners manages.

“We were excited to be able to support KSL in their financing efforts,” said Jared Kelso, a managing director in C&W’s Global Hospitali-ty Group, part of C&W’s Capital Markets service line. “The Homestead has accommodated gener-ations of guests and is well positioned for contin-ued success under the stewardship of KSL.”

The resort is currently undergoing $25 million in renovations designed to boost its already sub-stantial list of amenities. The National Historic Landmark includes championship golf courses, a spa and natural hot springs, an equestrian center, a 45-acre ski resort and a shooting club.

In a grim coincidence, the Richmond Times-Dispatch reports that human remains were found in woods near one of the resorts golf courses

a little over a week ago. They’re thought to be those of Beacher Hackney, a Homestead employ-ee charged with killing two co-workers there in March 2009. He hasn’t been seen since.

The Homestead is located at 7698 Sam Snead Highway in Hot Springs, V.A.

An email sent to KSL seeking comment about the financing and the planned upgrades wasn’t returned in time for publication.

Rockwood Launches West Coast Platform

» Rockwood Real Estate Advisors, a New York-based commercial real estate investment banking firm and a subsidiary of CW Financial Services, has announced the launch of a West Coast Investment Sales and Mortgage Banking platform. The compa-ny is opening its first offices on the West Coast in San Francisco and Los Angeles.

Sean Fulp just joined Rockwood as managing di-rector and Head of Western U.S. Investment Sales to lead the investment sales expansion effort. Andre Dobrowsky, a Rockwood managing director, relo-cated from New York to Los Angeles to establish

The Homestead resort.

For news tips, email Alessia Pirolo at [email protected] or call (212) 407-9308.


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MiscEllaNy the mortgage banking platform. “We are very excited about our most recent ex-

pansion into San Francisco and Los Angeles, and the high-caliber team we have brought on to lead this di-vision,” said Dan McNulty, president of Rockwood, in a prepared statement

Previously, Mr. Fulp was a managing director of Newmark Knight Frank’s Capital Group based in San Francisco. From 2010-2012 in this role, he com-pleted more than $1 billion of institutional sales transactions. Rockwood has also hired Michael Heg-set to join Mr. Fulp in managing the day-to-day ana-lytics of the group.

Mr. Dobrowsky joined the firm in 2005. Since then he has arranged more than $3 billion in trans-actions. In his 20-year career he has arranged $10 billion in transactions specializing in debt and equi-ty placement, balance sheet lending facilities, lines of credit, preferred equity, construction loans and note sales.

Rockwood has other offices in Atlanta, Dallas, Miami, Orlando, Washington D.C. and West Ches-ter, Ohio.

Hudson Realty Capital Funds $12.5 Million Industrial Bridge Loan

» Hudson Realty Capital has funded a $12.5 mil-lion bridge loan, which is secured by an industrial building in a suburb of Baltimore, MD.

The property is 689,000 square feet and sits on 34-acres. Tenants there include a manufacturing company, a mechanical contractor and a logistics company.

“Like many owners of Class B and Class C assets in the nation’s middle markets, this sponsor need-ed a competitively priced, non-recourse bridge loan to stabilize the property for the longer term,” said Geoffrey Smith, a Hudson managing director. “Hud-son is helping fill the lending void in primary and secondary markets for storied properties that are poised for a rebound and sustained growth.”

The rebound and growth that Mr. Smith men-tioned is evidenced in Cassidy Turley’s Industrial Market Snapshot for the Second Quarter of 2012. It showed continued demand over the quarter for the asset class in the greater Baltimore area. This in-dustrial property sits in Arbutus, just south of Balti-more, with easy access to Interstate 95 and the Port of Baltimore.

While Cassidy Turley projected that new industri-al construction will remain low, demand has pushed the vacancy rate for industrial down two percent-age points since the end of 2010 to 12.06 percent for warehouse properties.

cBRE Brokers JV’s Purchase of 393 West End avenue

» Simon Development Group and Cube Capital have bought 393 West End Avenue, in a sale bro-kered by CBRE, the firm said recently. The $68.3 million sale closed August 21.

Cube Capital, a London-based investment firm, partnered several months ago with Simon Develop-ment on plans for a 260-room hotel at 11 East 31st Street. This most recent deal is for a 134,000-square-foot residential building located on West 79th Street and West End Avenue on the Upper West Side—bought from 393 West End Avenue Holdings, an LLC.

CBRE executive vice president Paul Leibowitz, first vice president Robert Garrish and vice chair-men Darcy Stacom and Bill Shanahan arranged the sale.

Simon Development CEO, president and found-er Jonathan Simon told The Mortgage Observer that the property, right across the street from the Apthorp, would be revamped.

“We just thought there was tremendous value and we could reposition it as a high-end rental,” Mr. Si-mon said. “We think it’s undervalued and that we can reposition it into a really high-end asset.”

For his part, Mr. Leibowitz, the CBRE first vice president, remarked at the building’s prime location.

“The 393 West End Ave transaction met with the new owner’s objectives by delivering a superior Up-per West Side corner location combined with poten-tial upward repositioning,” Mr. Leibowitz said.

There was not a bank used to finance the pur-chase, but Mr. Simon said that they were going to be doing some financing with the property. “We’re working on that now,” he said.

CWCapital Sale to Walker & Dunlop Completed, Berman to Leave After Transition

» Walker & Dunlop said in late August that it has completed its purchase of CWCapital. The comple-tion of the deal, which was announced back in June, makes Walker & Dunlop one of the largest com-mercial real estate lenders in the United States. At the same time, it illuminated the role that Michael

Berman, CWCapital’s CEO, will play now that the acquisition is complete.

The purchase price was $234 million—$80 mil-lion in cash and $154 million in Walker & Dunlop stock that was issued to an affiliate of Fortress In-vestment Services. CWCapital was previously a sub-sidiary of CW Financial, which is owned by funds that Fortress affiliates manage.

“This is a fantastic deal for Walker & Dunlop and CW Capital,” Walker & Dunlop chairman, president and CEO Willy Walker said in a prepared statement about the deal. In 2007, Walker & Dunlop embarked on an ambitious five-year growth plan that has in-cluded two major acquisitions and the company’s IPO. Our success has driven Walker & Dunlop from the 45th largest commercial real estate lender in 2007 to the 8th largest following this most recent acquisition.”

Mr. Walker’s assessment of the new firm’s size is based upon combining the two firms’ sizes as re-ported in the Mortgage Bankers Association’s 2011 rankings.

Walker & Dunlop also said Tuesday that Michael Berman, CWCapital’s CEO, will now serve as exec-utive vice president of Walker & Dunlop, where he will focus on Government Affairs through the

393 West End Ave.


10


iNdustry rEsEarch end of 2012. There was no word on what happens then, and Mr. Berman didn’t return a call seeking comment.

However, he said in a prepared statement that he believes “the two teams will work exceedingly well together, increasing the strength of the already in-credible platform Walker & Dunlop has in place.”

Mr. Walker said that CWCapital would add sub-stantially to that platform. “The increased loan origination volumes and financial wherewithal this acquisition provides accelerates Walker & Dunlop’s progress toward becoming the premier commercial real estate finance company in the United States,” Mr. Walker said.

Much of that activity will be focused on the New York tristate area. Mr. Walker told The Mortgage Observer in June that a large presence in the area was crucial for anyone wanting to be a “significant player in the multifamily space.”

M&T Bank Set to Acquire Hudson City Bancorp for $3.7 Billion

» M&T Bank said in late August that it had en-tered into a definitive agreement to acquire Hud-son City Bancorp for $3.7 billion in stock and cash. The acquisition will see Hudson City merge into an M&T subsidiary—giving M&T access to 135 new branch locations in New Jersey, New York and Fairfield County, Conn. The deal would make for the largest bank merger of 2012 so far.

The boards of directors of each bank have ap-proved the merger, which is now awaiting regu-latory approval and approval by the shareholders of each company.

According to an investor presentation about the merger available online, the merger will greatly diversify Hudson City’s monoline resi-dential mortgage focus—99 percent of its portfo-lio as of June 30, 2012. It will create a pro forma commercial real estate platform of $17.9 billion, providing the biggest boost for M&T, however, in the area of residential mortgages.

“M&T, which was established in 1856, and Hud-son City, founded in 1868, have been serving their customers and communities for generations, and we look forward to building on that long history and tradition together in the future,” M&T Chair-man and CEO Robert Wilmers said in a prepared statement about the merger.

M&T acquired Wilmington Trust in late 2010.Hudson City Chairman and CEO Ronald Her-

mance Jr. said that the merger “creates tremen-dous opportunities to build on the successes that each company has achieved individually in its

own markets.”M&T is headquartered in Buffalo, N.Y., and has

$80.8 billion in assets. Post-merger, the bank’s pro forma balance sheet is anticipated to increase by roughly $28 billion, it said.

ARC New York Recovery REIT Expands in Brooklyn

» An affiliate of real estate investment advisory firm American Realty Capital has financed its re-cent acquisition of three retail and office buildings in Brooklyn’s Sheepshead Bay neighborhood with a $20.2 million loan, provided by People’s United Bank, according to public records.

Meridian Capital Group, which negotiated the agreement, confirmed that it closed a five-year loan with a fixed-rate under 3.5 percent. “The privilege of working with leading sponsors allow us to es-tablish a relationship and play advisory role rather than simply focus on an isolated transaction,” said Tal Bar-Or, Meridian Capital managing director. “In this case, we worked with our lending partner to understand the client’s business plan and tailor the right solution,” he added.

The affiliate of American Realty Capital initially bought the three properties, which are located at 1100-114 Kings Highway, 2067-73 Coney Island Av-enue and 2091-97 Coney Island Avenue, using equi-ty and drawing on its credit facility. The spaces are fully leased.

sold! But did you Maximize your Non-Performing crE Loan Proceeds?

» According to data from loan sale advisor DebtX, sellers of non-performing commercial real estate loans might want to reconsider the type of auction they use. DebtX studied results from loan sales in its marketplace since 2010 and found that sealed bids generated significantly higher proceeds than those generated by English forward auctions.

The difference DebtX’s analysis found, available in a white paper it compiled, wasn’t insignificant—the sealed bids in fact generated proceeds up to 20 per-cent higher.

Confused? So were we. The Mortgage Observer checked in with DebtX CEO Kingsley Greenland, who explained the difference between the two formats.

“The sealed is that you don’t see other people’s bids and you don’t know what’s going on—when you sub-mit your bid it’s sealed,” Mr. Greenland explained. “The English forward auction is that you can see what other people are doing. You don’t know who is bid-ding, but you will see other bids. It’s kind of similar to a live auction, but it’s not in person.”

Mr. Greenland said that the company’s analysis showed that the difference was marked—and con-sistent. Currently, he estimated, most banks use the sealed bid auction, while special servicers opt for Eng-lish forward auctions.

With special servicers potentially motivated by the lure of fees generated via the auctions and banks fo-cused on maximizing profits, the fact that the two would use different auction formats isn’t surprising.

As for the reasons the auctions generate such

different results for sellers, Mr. Greenland said that it comes down to perceptions about the bidding process’ outcome scenario.

“People have different assumptions of what the outcome will be, and that radically changes their bid amount,” he said. “So I can have three people look at a $1 million, non-performing loan and come up with three different prices—from $500,000 to $1 million to $1.5 million. If I do it in a sealed bid auction, those are the three bids I’m going to get.”

Meanwhile, Mr. Greenland said, with an English auction, that bidder who was going to bid $1.5 million sees that the next highest bid that’s out there is $1 mil-lion. Therefore, he bids $1.1 million.

“It’s like a bell curve,” Mr. Greenland said. “Rather than collapsing the bell curve into the center, which an English auction does, the sealed bid makes the person who’s way out to the right of that bell curve—you take his bid and win.”

Asked about feedback from sellers of these loans and if he had received any yet or heard of any sellers who had switched up their formats, he said that he had not. “I would hope that anyone that was considering using an English auction would not,” Mr. Greenland said. “We offer it both ways. For performing loans we think that the English auction is a great methodology, by the way. It’s just that the data shows that you’re go-ing to get more money if you do a sealed bid. We would think that logic would dictate that if someone were selling a non-performing commercial real estate loan, they should use a sealed bid.”


12

Q&A / October 2012

by Carl Gaines

Jeffrey BakerSavillsThe Mortgage Observer spoke to Savills Executive Managing Director Jeffrey Baker this month. Mr. Baker, early to securitization work, talked about the future of this market and his focus at the company.

The Mortgage Observer: How did you get your start in the industry?Jeff Baker: I have an MBA from Wharton and came to New York in ’86 and worked for Eastdil for a number of years and was a partner there and subsequently moved on in the mid ’90s.

From Eastdil did you go directly to Savills?No, at the time we were part-owned by Nomura

Securities. Nomura owned a 50 percent interest in Eastdil, and at the bottom of the terrible ’90s market I moved directly in to Nomura and stayed there for a while and did some of the early securitization work. We had done the precursor to that at Eastdil. We had done a number of highly structured convertible mortgage and other financings back in the Eastdil days, and then we continued that business at Nomura. Ultimately, Jeff Cooper and I, who were partners there, went to Cushman & Wakefield and stayed there for a number of years. Ultimately we joined back up with our ex partners from Eastdil at Granite.

What do you think of the securitization market these days?

I’ve been involved in the market since pretty much the beginning, so when I went to Nomura in ’94 it was in its infancy. We went from a tiny market volume to something like a $250 billion-a-year type origination. Obviously, when the markets collapsed, the securitization market was pretty badly hit, and it has just taken a long time for it to effectively be rebuilt because there just wasn’t confidence in the capital markets for the product that they were creating. And the fact that the rating agencies have issued ratings that didn’t hold up—all that didn’t help. It’s a slow rebuilding that’s going on and I have absolutely no doubt that it will rebuild to a very major component of the capital markets again. It’s just inevitable.

Do you think there are going to be any major differences in the way that it rebuilds?

Yeah, I think that in the later days of securitization—before the collapse, obviously— underwriting got very aggressive, and the competition for deals was so great that a lot of structural changes were made in deal format that ultimately led to many of those deals being deeply underwater and unsuccessful. I think that what the industry has been struggling with is how to create a real third-party evaluation of those positions to make sure that investors who are not that sophisticated in the sector are actually getting what they think they’re getting. And I believe that having some level of accountability, whether it’s some portion of securitization being held by the originator, etc., will more than likely be required going forward long term.

Savills tends to provide such a wide range of services. What do you spend most of your time working on?

These days I’m spending quite a bit of time focusing on the multifamily sector because it’s obviously been a very active sector and it in many respects has the strongest fundamentals of all the property types. We’ve done quite a bit of development capitalization in the multifamily sector, and we’ve also done quite a bit of recapitalization of deals that were overleveraged during the bull part of the market and that just had to be reworked. Then we do a lot of asset distributions as well, so it is a broad range, but generally speaking, we get involved in larger, more complex situations—whether it’s a recapitalization of a large portfolio or it’s a capital raise for new acquisitions. Within the past 12 months we’ve completed transactions of over 8,000 apartment units across the U.S., and that’s included a $300 million capital raise for a large U.S. multifamily owner-operator for new acquisitions and development at one end of the spectrum, and it’s included selling small REO properties for offshore banks at the other end of the spectrum.

Any recent New York-area deals? Absolutely. We’re in the process right now of

capitalizing around a $400 million apartment and retail mixed-use development just across the Hudson River in Fort Lee, New Jersey, at the base of the George Washington Bridge. We’re also selling a property in Hoboken right now and selling a portfolio of apartments in Manhattan. We’ve also recently disposed of several assets that were effectively foreclosed assets by banks that were failed—one was a failed condominium project, which is just restarting now.

Any transaction that was particularly difficult or challenging?

I would say that many that we work on are in fact quite challenging and complicated. An interesting one that we just did last year involved around 5,000 apartment units in the Midwest, which had been acquired and renovated at the peak of the market. Asset values had plummeted. The ownership group was relatively inexperienced in the sector, they were really stuck, and there was a major litigation going on between their lenders and the group. We came in and effectively acted as the advisor for the borrower group and a new capital source that was coming in to recapitalize them. We effectively raised the capital to restructure the whole portfolio. We negotiated a loan modification and new financing for the portfolio and worked out that whole process, and ultimately those assets have now largely been reworked, and they’ve gone from 70 percent occupancy up to 90 percent occupancy.

Jeffrey Baker

TMO.1012.CS3.Q+A.indd 12 9/27/12 12:02:39 PM

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Scheme of Things / October 2012 Monthly charts of commercial real estate financings across New York City

The Mortgage Observer has compiled a monthly snapshot of top commercial real estate financings in New York City. The latest data, for August, shows the most financing activity in Brooklyn’s Broadway Triangle neighborhood, where development has been a hot-button issue recently. Other data showed New York Community Bank remained tops, along with the entire borough of Brooklyn.

Mortgage Charts

428310 10885

After a large amount of refinances for the month of June--1095 in all--figures started to creep back upward for August 2012 with a total of 428. Also on the rise--purchases.

JULY AUG

REFINANCES JULY AUG

PURCHASES

With 76 recorded transactions this month, New York Community Bank kept the top spot for top lenders during the last full month of summer. Rounding out our list for August is Intervest National Bank.

Refinances vs. Purchases

Top 10 Lenders

Total sales were up across all the boroughs for August, with the exception of Brooklyn, where sales fell off slightly compared to July 2012.

Total Sales by Borough

31

176

2436

85

46

192

3141

74

Our new map of financing hot spots makes zeroing in on the areas that saw the most activity easier. Brooklyn’s Broadway Triangle, Bed Stuy and Crown Heights made the map, as did Harlem, a swath from Korea Town west to Hell’s Kitchen and the South Bronx (see page 22).

JULY AUGALL

JULY AUGMAN.

JULY AUGBRONX

JULY AUGBROOK.

JULY AUGQUEENS

BANK JULY 2012 BANK AUGUST 2012

New York Community Bank 45

JPMorgan Chase 39

M & T 35

Capital One 24

Signature Bank 21

Astoria Federal Savings Bank 13

Dime Savings Bank of Williamsburgh 12

Wells Fargo 10

Sovereign Bank 7

Flushing Savings Bank 6

People’s United Bank 6

New York Community Bank 76

Signature Bank 38

Capital One 27

Astoria Federal Savings Bank 21

JPMorgan Chase 19

Investors Savings Bank 14

Dime Savings Bank of Williamsburgh 12

Flushing Savings Bank 11

Sovereign Bank 10

Intervest National Bank 9

Most Active ZIP Codes–Financing

11201 18

11211 15

11207 15

11221 12

11237 11

11206 11

A 11206 7

B 11216 6

C 10030 5

D 11213 5

E 10018 5

F 10458 5

ZIP CODE JULY 2012 ZIP CODE AUG 2012

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16

The M.O. Columnists / October 2012

Stein’s Law

Joshua Stein

Why does it cost so much in legal fees to close a commercial real estate loan? How can a borrower control legal fees

for one of these transactions? What’s the magic answer?

Any set of loan documents typically goes into tremendous detail on a tremendous range of issues. A complete and perfect negotiation of the documents may require full exploration of all those issues, which can take a lot of time and cost a lot of money. But every one of those issues could, in some circumstance, make a difference. As the starting point for discussion, then, borrowers and their counsel should at least consider working their way through and negotiating everything.

A borrower may want to direct counsel to take a different approach, by telling them to focus on only three things in reviewing and negotiating the documents.

First, make sure the loan documents get the deal right—the dumb stuff staring everyone in the face—such as the maturity date, the interest rate, who will sign which guaranties and anything that relates directly to how much the borrower will pay for the lender’s money. Given the complexity

Quicker And Cheaper Loan Closings?

of modern legal documents, the fundamentals of a deal often can become overwhelmed by details, alternatives, hypotheticals and side issues.

For example, have you ever tried to figure out the loan amount, interest rate and maturity date just by reading a syndicated loan agreement? You can do it, of course, but it’s typically an ordeal that can involve dozens of interacting defined terms.

Important points can slip between the cracks in all that complexity. Borrower’s counsel must make sure that doesn’t happen.

Second, try to trim back the verbiage of the loan documents at least enough so the borrower isn’t automatically in default at the moment of closing or when proceeding with his or her basic business plan for the property. Don’t worry so much about hypothetical eventualities, provisions unlikely to become relevant in the ordinary course

of events. Focus on the parts of the documents that relate to the borrower’s real daily life in operating (and, where relevant, developing or improving) the property. And make sure the financial reporting and insurance requirements match what the borrower really expects to do.

Third, and most important, focus on the

guaranties. If someone agreed to guaranty something in connection with the loan, confirm that the guaranties cover only what they should cover and nothing more. No one should face personal liability as a guarantor for anything more than the business deal contemplated. Understand all possible circumstances that could trigger the guaranty. Recent litigation has shown that surprises lurk in “standard” carveout guaranties, including in the “boilerplate.” Counsel should identify and prevent those surprises.

If a borrower tells counsel to focus on the three areas just described—and it is the borrower’s decision, not the lawyer’s—this means some verbiage in the loan documents will escape close legal attention. Arcane requirements for lender approval to various unlikely matters may just survive, and the lender won’t have to be “reasonable.” Ordinary obligations to preserve the property may not have the benefit of complicated exceptions and limitations that lawyers could have created. If the borrower goes into default, the documents will give the lender the ability to take various unpleasant actions, which would have, for the most part, also been true even if the borrower had tried to negotiate those unpleasant actions.

In short, the loan documents won’t be as “good” as they could have been if the lawyers had worked harder. But, for three reasons, the borrower might conclude they will be “good” enough.

First, if the borrower makes the required loan payments when due, the lender probably will give the borrower a wide berth and mostly leave him or her alone. And if the borrower doesn’t pay the loan, everything will change.

Second, if the borrower takes care to build and maintain a good relationship with the lender, the lender will probably work cooperatively with the borrower as possible issues arise.

Third, lenders usually don’t want to have a loan in default, and they don’t want the collateral. Once the borrower has the lender’s money and the lender just has the loan documents, much of the practical leverage switches to the borrower.

Of course, much will depend on the type of lender involved. Today’s “nice” lender may sell the loan to tomorrow’s “mean” lender.

It ultimately amounts to a business decision and a judgment call. A borrower may decide it makes sense to save money and time today in exchange for the possible risk of less-favorable loan documents later, particularly if the borrower has some comfort that any problems will probably arise only in secondary or tertiary areas of the loan documents.

Joshua Stein is the sole principal of Joshua Stein PLLC. The views expressed here are his own. He can be reached at [email protected].

TMO.1012.CS3.Columnists.indd 16 9/27/12 11:49:55 AM

17

October 2012 / The M.O. Columnists

The Basis Point

Sam Chandan

The (Sorry) State of Construction Lending

For all but the most rarified development opportunities, the business of construction lending came to an abrupt halt during the

financial crisis and recession. Weighed down by the frustratingly slow pace of recovery in jobs, the outlook for new space demand has been mixed in the aftermath of the downturn. Absent a stronger outlook for absorption, and with assets trading below replacement cost in most markets, post-crisis development projects have been slow to get underway.

At least on the national stage, investors and their financiers have been reluctant to put money at risk outside of the apartment sector. Even where the risks can be well mitigated, banks’ management of legacy construction loans and their complex supervisory relationships have added to drags on activity. Signs of a thaw are emerging slowly in secondary markets. In New York and other cardinal markets, preliminary tabulations for the third quarter point to greater lender risk-taking, both in terms of higher loan-to-costs and less demanding guarantees.

With a relatively small number of new projects in proposal or planning nationally, construction loan demand has been weak heading into the fall. Similarly, underwriting standards have remained exceptionally tight for small- and mid-sized construction loans. Even in markets where standards have eased for permanent financing backed by stabilized assets, strong sponsorship and compelling proposals are not dominating inherent project risk and higher estimated loss severities.

From a peak of more than $630 billion during the

first quarter of 2008, the balance of construction loans on bank balance sheets has fallen by almost two-thirds as of the second quarter. Single-family and small residential development loans have registered the most precipitous declines. But larger multifamily and commercial loans are also just a fraction of their

peak levels.The default rate on construction loans

has come off its highs but remains above 10 percent as of the second quarter of 2012. Even at comparable non-performing rates, higher loss severities and recidivism rates on modified construction loans imply deeper cuts into reserves. Of bank construction loans modified in troubled debt restructurings, almost 54 percent are now delinquent, in default or reclassified as non-accrual.

The Office of the Comptroller of the Currency’s most recent Survey of Credit Underwriting Practices shows a minority of banks is still tightening standards on commercial real estate construction loans. Most report holding the line on tighter standards established during 2009 and 2010. Outside the exclusive environs of New York and its peer markets, that suggests little relief for borrowers seeking access to financing.

Regulatory constraints on new construction lending are hardly surprising. The experience of the late 1980s and early 1990s, when concentrations in construction lending contributed to record bank failures, has not escaped institutional memory. Chandan Economic’s preliminary data for the third quarter show a predictable pattern that, in most cases, validates the OCC’s survey findings.

Owing to robust fundamentals and apartment

investors’ bullish outlook, multifamily construction has set the pace of the development recovery. The availability of construction-to-perm financing through life companies has facilitated some larger projects—in Manhattan, Brooklyn and elsewhere—with lower-risk profiles but higher absolute funding requirements. On more favorable terms to the borrower, Federal Housing Administration financing has been critical to the broader multifamily trend.

Rental construction starts jumped 60 percent between 2010 and 2011. That momentum shows little sign of easing, with starts in the first half of 2012 rising another 44 percent. The force of the development pipeline has yet to reach the market. Completions began to trend higher in the second quarter, heralding sharper increases over the next two years.

Data from the Commerce Department show private sector construction spending was up 15 percent in July 2012 as compared to a year earlier. That increase reflects a near 50 percent jump in nominal spending on new multifamily assets. But it also captures surprising improvements in the retail and hotel sectors. As frenzied as the pace of hotel development is in New York, local outlays cannot fully account for the national result. From their very low levels, the second and third quarters’ data show observable increases in construction activity and related financing for these other property types, albeit on terms and with structures that are markedly more conservative than for apartments.

Outpacing national investment trends, New York’s condominium, rental apartment and trophy office markets are still early into the development boom heralded by large-scale projects and their financing announcements. Asset prices are high enough at the best locations that development lending is a viable option for risk-tolerant institutions. The trend is most apparent in the condo market but has translated into a deeper pipeline for office and hotel assets as well.

If market average occupancy rates were the decisive metric, some of the most visible projects would not get underway. The developers of new space are unlikely to bear the brunt of higher vacancy rates implied by the introduction of new inventory ahead of strong jobs numbers. Given the relative age of New York’s property base, historical trends suggest that tenants will gravitate to the newer properties, with older and functionally obsolete stock suffering the negative impact of tenant migration. For lenders on the new projects, that migration may be of little concern. For incumbent lenders, the risks should be given due consideration.

Sam Chandan, Ph.D., is president and chief economist of Chandan Economics and an adjunct professor at the Wharton School. The views expressed here are his own. He can be reached at [email protected].

TMO.1012.CS3.Columnists.indd 17 9/27/12 11:50:07 AM

Counsel Matt Meyers, an expert in construction-defect issues and litigation who has extensive experi-ence in the New York tristate region, will join Herrick, Feinstein LLP’s Community Association Group.

“Herrick’s Community Association Group deliv-ers a wealth of expertise, creativity, exemplary ser-vice and cost-effective solutions for our clients,” said David Byrne, a partner at the firm. “Matt’s track record of success in the areas of developer- and construction-related matters will complement our full range of services and help our growing ros-ter of community associations, co-op and condo boards function more effectively, and we look for-ward to having him as part of our team.”

Mr. Meyers will work out of the firm’s Newark, N.J., office and will specialize in assisting associa-tions and boards with sponsor and developer tran-sitions and construction defect litigation.

Skadden, Arps, Slate, Meagher & Flom LLP has named real es-tate attorney Russell Wohl as counsel in the New York office. Mr. Wohl will handle all as-pects of transaction-al real estate, including leasing, subleasing, acquisitions, mortgage and as-sorted security-based financings.

“Russell’s expertise will be a valuable asset to our clients,” said Harvey Uris, Skadden’s global real estate practice leader. “His extensive leasing experience complements our existing capabili-ties and will help deepen and extend our broad range of services to clients.”

Prior to joining the firm, Mr. Wohl worked as a real estate counsel at another law firm in New York. He holds a law degree from St. John’s Uni-versity School of Law and a bachelor’s degree from State University of New York, Binghamton.

Bruce Dashevsky has been hired by A10 Cap-ital, which specializes in small- to middle-market short-term commercial real estate financing. He’ll head up business development for the New York tristate region.

“We are pleased to have Bruce join our firm to address the demand for commercial mortgages that we are seeing in this market,” said A10 CEO Jerry Dunn. “Our expansion into the tristate area continues to affirm A10 Capital as the lender of choice for commercial real estate investors in the small to middle markets.”

Mr. Dashevsky previously originated commercial real estate loans for MetLife Capital and GE Capital.

portfolio construction, will expand the opportuni-ties for institutional and retail clients to diversify their portfolios and tap the potential for attrac-tive risk-adjusted returns in a growing global pub-lic real estate market,” said Marc Halle, a senior portfolio manager and head of PREI’s team.

Prior to Prudential Real Estate Investors, Mr. Gallagher was an assistant fund manager at Aviva Investors and an equity analyst at both Citigroup and Deutsche Bank. He holds a bachelor’s degree in economics and government from Harvard Uni-versity and a master’s degree in international po-litical economy from Cornell University.

Boutique real es-tate finance firm Park Madison Partners has named Gentry Ash-more Hoit partner. Ms. Hoit will join the found-ing partners, Nancy Lashine and Suzanne West, in advising clients on real estate acquisitions and raising capital.

“With a more experienced and savvy U.S. institu-tional investor community looking to access deals opportunistically on a direct basis, we have seen great demand for seasoned professionals who are familiar with the private equity real estate space,” said Ms. Lashine. “We are pleased to have profes-sionals like Gentry who understand the need for creativity in this space in developing strategies that meet clients’ investment requirements.”

Ms. Hoit has worked in real estate investing and advisory services for 20 years and has held posi-tions at Atlantic Assets Group and Atlantic As-sets Summit, among other firms.

Diane Rau Siegal will assume responsibili-ties as senior managing director at the boutique real estate company Handler Real Estate Or-ganization. She will focus on representing pub-lishing and media firms, educational facilities, nonprofit organizations and related commercial transactions.

“Diana is a versatile and accomplished real estate professional who brings with her a long history of success to our expanding real estate di-vision,” said Scott Galin, a principal at Handler. “She has orchestrated many noteworthy transac-tions around New York City, representing both tenants and owners, and provides the kind of per-sonal, sophisticated service our clients expect.”

Prior to joining Handler, Ms. Siegal was a se-nior director at First New York Realty, where she worked for over two decades.

Hudson Realty Cap-ital LLC has named Geoffrey Smith manag-ing director. Mr. Smith has been tasked with ex-panding the firm’s lend-ing platform to include conventional senior and subordinate loans on transitional and stabi-

lized commercial real estate, as well as the syndica-tion and distribution of real estate assets.

“Geoff’s expertise and industry relationships will be integral to Hudson as we realize the expansion and diversification of our real estate lending plat-form over the short and long term,” said David Loo, a managing director and co-founder of Hudson.

Prior to joining Hudson, Mr. Smith was a manag-ing director at Natixis North America, an affiliate of the corporate, investment and financial servic-es arm of Groupe BPCE, France’s second-largest banking group. Mr. Hudson has held similar posi-tions at Morgan Stanley, JPMorgan and Nomu-ra Securities.

McKissack & McKissack, which bills itself as the nation’s oldest minority-owned construction firm, has hired David Kane as executive vice president and chief operating officer, it was announced last week.

Mr. Kane, who previously served as executive vice president of the capital program division at the city Economic Development Corporation, will now take the helm as McKissack & McKissack’s first chief operating officer in the New York region, according to a release issued last week.

Before joining the firm, Mr. Kane’s experiences in-cluded the development of New York City’s two mi-nor league baseball stadiums in Staten Island and Coney Island, Brooklyn. He also immersed himself in street projects along the commercial corridors of Bedford-Stuyvesant and assisted in the demolition of the old Yankee stadium in the Bronx, officials said.

“We are very pleased to add David to our team,” said Cheryl McKissack, president and chief exec-utive, in a prepared statement. “During this time of growth for McKissack & McKissack, I feel that Da-vid’s extensive industry expertise will aid in our vision and allow us to continue to deliver uncompromising performance, services and value.”

Prudential Real Estate Investors has named Michael Gallagher associate portfolio manag-er. Mr. Gallagher will manage U.K. and European strategies.

“Mike’s deep understanding of the U.K. and European markets, along with his experience in

18

Work Force / October 2012 Hirings, promotions, defections and appointments

Gentry Hoit

Geoff Smith

Russell Wohl

TMO.1012.WorkForceCS3.indd 18 9/27/12 1:05:53 PM

Next month, The Mortgage Observer will feature 20 of the most promising commercial mortgage brokers under 35 in the New York tristate area. Whether it’s thanks to financing volume or the complexity of the assignments they’re achieving success on, we want to know who this next generation is. So help us decide! The due date for nominations is October 8, 2012. Those selected will be featured in our November issue, in alphabetical order. Include titles and company names for all submissions as well as a little bit about why you think they deserve to be featured.

Send nominations to [email protected]. All emails will be kept strictly confidential.

Top CommerCial morTgage Brokers Under 35

on The 20rise

NOmiNaTe YOurself, a cOlleague, a frieNd … iT dOesN’T maTTer TO us. JusT submiT a Name bY OcTOber 8, 2012.

20ontheRise.indd 14 9/26/12 4:22:35 PM

20

Power Profile / October 2012Power Profile / October 2012

TMO.1012.CS3.POWERPROFILE.indd 20 9/27/12 4:41:00 PM

21

JASON PENDERGIST

Chasing DealsWest to East

by Carl Gaines

JPMorgan Chase CTL exec looks past the trophies to the gold in city’s blue-collar core.

W hen Jason Pendergist arrived in New York to head up Chase commercial term lending for the East a little over

a year ago, the bank’s commercial real estate business here was still settling after its FDIC-facilitated acquisition of Washington Mutual in 2008 and the overall economic downturn.

Asked recently about the state of the commercial real estate operations prior to his arrival, he indicated that there was defi nitely room for growth.

“It was a skeleton crew that was doing some essentially internal deals,” he told The Mortgage Observer. “So our business the last few years had been focused on hanging on to some clients that

we had. We hadn’t been so focused on trying to grow the business or acquire new clients or get our message out.”

One of the challenges that he and his team faced was educating the marketplace.

“We’re the nation’s largest apartment lender,” he said. “We’re closing somewhere around 100 loans a month here in the Northeast.”

These deals, he said, are primarily focused in the four boroughs of Manhattan, the Bronx, Brooklyn and Queens, and the vast majority of them are centered around work force and a� ordable housing—an asset type that Mr. Pendergist said he fi nds particularly rewarding to work on.

In fact, though he was familiar with New York prior to moving here, having visited multiple times, as a recent transplant a lot of his down time the past year has been spent exploring the city

PHOTO BY MICHAEL NAGLE


22

Power Profile / October 2012

and its patchwork of neighborhoods. Weekends were devoted to the aforementioned

urban exploration, a necessity.“There’s nothing like getting in the car and just

driving some deals,” he said. “I think virtually every weekend that we’ve been here over the last 13 months now, we’re out driving neighborhoods—I’m driving my wife nuts with it now, I know.”

In addition to driving the neighborhoods, he has walked them, sometimes visiting buildings owned by the owner-operators that Chase Commercial Term Lending sees as key to its business here. Mr. Pendergist estimated that 85 percent of what he works on is apartment lending, with the remaining 15 percent being retail, mixed-use and o� ce. His geographic area of responsibility, as head of commercial term lending for the East, stretches from Washington, D.C., to Boston. The focus is on urban locations with high barriers to entry for new construction—both physical and political.

When we fi rst met with him, in late July in the executive dining room on the 49th fl oor of JPMorgan Chase’s o� ces at 270 Park Avenue, Mr. Pendergist, his wife, young son and two dogs were living in Columbus Circle. Southern California transplants, they had survived their fi rst, albeit mild, winter in the city.

“We couldn’t have picked a better year to do it, I don’t think,” he said of the timing of the move from California. “It snowed twice this year, at least that we saw. We’ve got a 2-year-old now and two dogs, so in the city we were a little concerned for what it might mean with snow and getting the kid and dogs around, and we couldn’t have been luckier.”

From his perch above Park Avenue, he can see two impressive Extell Development projects rising on the skyline—the International Gem Tower just to the west and One57 to the northwest.

“It’s been exciting over the last 12 months to see One57 come from a hole in the ground to however many stories it is now—80 or 90,” he said. “And to see the Gem Tower build itself up, not only from an architectural standpoint—it’s a beautiful building to look out at every day.”

But, he was quick to add, there’s not a sense of longing to be in on fi nancing these larger deals.

“We really like the niche that we’re in,” Mr. Pendergist said. “We like dealing with small business. We like dealing with family owner-operators. And we like that we’re able to provide sustainable fi nancing to the low and a� ordable end of the spectrum. We see a never-ending demand for those units and for that space.”

Lending against the blue-collar stability found in the boroughs is a “no-brainer,” he said. “It’s as bond-like an income as you’re going to fi nd out there.”

As he’s worked to build up the bank’s lending in

the East, Mr. Pendergist said that he has drawn on skills—both academic and athletic—learned while studying at the University of Colorado, where he originally enrolled with the aim of becoming a doctor.

Two of his roommates at the school were athletes, one a basketball player and the other a football player. Mr. Pendergist himself had played football and baseball in high school, where his high school football coach was a former Olympic weight lifter. He was well-versed in lifting technique, so, not surprisingly, workouts with his roommates at the school’s sports complex morphed into unsanctioned coaching sessions.

His lessons eventually caught the attention of the school’s head strength coach, who tore into him. Mr. Pendergist talked him through the techniques that he was passing on and ended up being hired as a graduate assistant.

“From a chance encounter at the gym, I landed a job as a speed, strength and conditioning coach for the University of Colorado,” he remembered. At the time, the school had more active NFL players than any other college. It was excellent at recruiting talent. But perhaps not so great at recruiting well-rounded talent. In the end, though, Mr. Pendergist learned how to motivate others. He also decided to change course.

“For me it was a foundational period in my life of learning the basics of coaching people, managing people, trying to learn how to get people to think aspirationally and set big goals and achieve them,” he said. “It was a really fun time.”

Due in part to that experience, he went back and got his MBA and stayed with the athletic department, moving over to the training table side. “I was working with more the education and tutoring side as I was going through grad school and that was a great segue way to be able to take coaching skills from the workout room and apply them now to the classroom, teaching people to understand complicated concepts and make sure these guys were maintaining their grades.”

Following graduate school, he went into fi nancial consulting, working for a litigation support fi rm, but then his wife got a job in Seattle, which prompted him to look for job opportunities there as well. The result was a job at Seattle-based Washington Mutual. He became a senior vice president and regional sales manager for the commercial term lending department there.

When Washington Mutual was closed in 2008, in what was the largest bank failure at the time, Mr. Pendergist followed Al Brooks, now president of commercial term lending at the bank, to JPMorgan Chase. He counts Mr. Brooks and two colleagues, Ed Ely and Greg Newman, as valuable resources and mentors.

“From a developmental standpoint, my boss and my two peers today—so the heads of the West and the Central regions—were instrumental in helping me to hone my expertise in the commercial real estate space and were really great at educating me in the lessons learned in this business and the importance of building a business that can survive the cycles,” he said, emphasizing that this last point is a real focus.

“Without having the historical look from my mentors, I wouldn’t have an appreciation for why we put the controls and the process in place that we did that got us through the downturn," he said.

Constructing this type of lending business is a twofold process, he said. First, there’s market selection—“making sure that you’re looking at the right areas from an a� ordability standpoint,” he explained. Second to this, and the principal driver in the multifamily space, is the supply-and-demand equation. “You want to make sure that you have an excess demand for apartment units and some sort of supply constraint on those market places.” Manhattan is the perfect example of this, he said.

His recent deals in the multifamily space include a 10-loan deal for a borrower in the South Bronx o� of the Grand Concourse. “The properties are ranging anywhere from 40 units to 115 units,” he said. “In total it was just shy of 600 units between the 10 properties.”

After fi nancing this portfolio 18 months ago, Mr. Pendergist said that his team was in the process of refi nancing it for a partnership with substantial experience. Rates for it are in the mid-three range for the refi nance, which is for $41.5 million.

Like many of the bank’s deals, it’s for a hands-on owner-operator—one much beloved by its tenancy, though Mr. Pendergist declined to reveal names.

“It really goes to show what happens when you’ve got a vested owner-operator who’s putting his heart and soul back into the property,” he said. “To see that emotional connection that he has with his tenants is a rarity, not only, I think, in this world but in this market in particular.”

Asked about messaging and what he most wants the market to know about what JPMorgan Chase does in the commercial real estate lending space, Mr. Pendergist said that primary would be that it’s the nation’s largest apartment lender.

“We’ve really honed and refi ned our craft so that we can provide a better to-market experience, and we pride ourselves in getting a deal done faster, quicker, easier, better than our competition, and it’s because we’ve got a tremendous infrastructure focused on getting a deal done from point A to point Z in as quick a time with as little pain to the customer as possible,” he said. “That’s my elevator pitch. But I really do believe it.”


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October 2012 / Power Profile

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We like dealing with small business. We like dealing with family owner-operators. And

we like that we’re able to provide sustainable fi nancing to the low and a� ordable end of the spectrum. We see a never-ending demand for

those units and for that space.those units and for that space.’We like dealing with small business. We like ‘


24

Good Deeds / October 2012

Bank Programs Find More Than Financial Value in Real Estate

BankinG on the

Community

W hen the owners of 197 East Broadway, on the Lower East Side, came to terms with the fact that their building was in

desperate need of a renovation after 124 years as their headquarters, they made a move that might look obvious for any holder of a valuable commercial real estate asset. They looked for a loan. On paper, though, the Educational Alliance—a non-profit serving about 50,000 New Yorkers with a range of services, from pre-school, health and wellness for seniors to addiction recovery programs—is not your average Goldman Sachs client.

Nonetheless, in August 2012, Goldman Sachs’ Urban Investment Group committed $44.1 million of capital to finance the redevelopment of the Educational Alliance’s building. The financing comes in part as a New Markets Tax Credit transaction, and in part as a senior loan directly to the nonprofit.

“Goldman Sachs, their Urban Investment Group,

adopted us,” Robin Bernstein, president and CEO of the Educational Alliance, told The Mortgage Observer. “They said they wanted to help us to make it happen, and they did.”

Since its launch in 2001, Goldman Sachs’ Urban Investment Group has provided more than $2.4 billion in lending and tax credit equity investments that benefit urban communities. “Every deal is different, every deal is crazy,” said Alicia Glen, managing director of the group. “There are a lot of different parts of the puzzle.”

The New Market Tax Credit program is one piece of the complicated puzzle assembled to help the Educational Alliance. Established in 2000 by Congress to attract investments to low-income communities, the program provides federal income tax credit to taxpayers making equity investments in specialized financial institutions called Community Development Entities. The credit totals 39 percent of the original investment amount and is claimed over a period of seven years.

So far 664 awards have been allocated, for a total of $33 billion in tax credits, according to the U.S.

by Alessia Pirolo

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October 2012 / Good Deeds

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Good Deeds / October 2012

Department of the Treasury. The New Market Tax Credit program expired in December 2011, though Congress is expected to reauthorize it after the presidential election.

For 2012 the Treasury’s Community Development Financial Institutions Fund received 282 applications for $21.9 billion of tax credits, the agency announced on September 25th. Once reauthorized, though, the project is expected to allocate tax credits for $3.5 billion, in line with the previous years.

In 2011, the Community Development Entities of JP Morgan Chase and U.S. Bank received the largest amounts of allocated tax credits—$100 million each. Many banks have created Community Development Entities, which outline the projects they intend to support each year in their applications to the Community Development Financial Institutions Fund.

“One of the projects we referred to in our application is for a federal qualified health center in the Bronx,” said Leigh Ann Smith, historic and new market tax credit equity originations manager for Bank of America. Bank of America has provided New Market Tax Credit allocations for projects such as the new building of the Lower East Side Girls Club and the expansion of the Greek yogurt manufacturer Chobani in upstate New York, which at full capacity is expected to create 450 new jobs.

Recently, Goldman Sachs’ Urban Investment Group made a $7.3 million New Market Tax Credit equity investment to finance the renovation of a 215,000-square-foot building in the historic Brooklyn Navy Yard. There, the Brooklyn Navy Yard Development Corporation aims to further its mission

Top: The façade of the Educational Alliance at 197 East Broadway before the renovations. The new center, bottom, is named for Manny Cantor, a Polish immigrant. Top right: Renderings of the renovated building, scheduled to open in the fall of 2013.


27

October 2012 / Good Deeds

and grow industrial jobs for the local community.In the case of the Educational Alliance, the

Goldman Sachs team determined that, in fact, the nonprofit owned a very good piece of real estate and had a proven track record raising money through its philanthropic efforts.

At the end of the 19th century, a group of wealthy Jewish business people, including Isidor Straus, the owner of Macy’s, the banker Jacob H. Schiff and Judge Samuel Greenbaum, founded the organization on the impoverished Lower East Side to help Jewish immigrants to settle in the United States.

After more than a century, the Educational Alliance has enlarged its focus to serve a wider range of groups. “The neighborhood has become one of the most economically diverse communities in New York,” Ms. Bernstein said. “There is the greatest disparity between great wealth and great poverty.”

Six years ago, the organization initiated fundraising efforts in order to renovate its headquarters. “Then, 2008 hit the project,” Ms. Bernstein said.

Rumor is that back in 1889 it took just one night for the Educational Alliance’s founders to raise $125,000—about $7.5 million in today’s currency. Over a century later, it was a much different story. The nonprofit, in the midst of the economic crisis, saw funding slow to a trickle. It had to look for a new way to move forward with its plans.

“We kind of tripped over the idea of the New Market Tax Credit,” said Ms. Bernstein. According to Ms. Glen, from the Goldman Sachs’ Urban Investment Group, the word of mouth among non-profit organizations helped the Educational Alliance to realize that Goldman Sachs could offer “the most

creative” way of financing the project. In August, the Urban Investment Group

committed $13.7 million as New Markets Tax Credit Equity and $13.3 million as a subordinate loan. It also provided a $17.1 million senior loan directly to the Educational Alliance to bridge grants from New York City and philanthropic pledges that the organization expects to collect in the coming years. This helped to provide immediate cash for the project. The non-profit capacity building group Low Income Investment Fund provided another $2.6 million subordinate loan.

“Because of the structure of the New Market Transaction, these loans will be completely paid off by 2017, without creating an unsupportable burden for the Educational Alliance into the future,” said Ms. Bernstein.

The renovated building is named for Manny Cantor, a Polish immigrant who started his own dry goods business after immigrating to the United States in 1921. It is scheduled to open in the fall of 2013. The center’s square footage will increase by roughly 15 percent—to more than 106,000 square feet, from the current 92,000 square feet.

A new 10,000-square-foot health and wellness center will serve the needs of the growing senior population of the Lower East Side.

At least 80 employees will be added to the current 650. At full capacity, the group anticipates that the building will serve twice as many people.

Meanwhile, like the organization as a whole has done, the building is adapting to the needs of a changing community. In the last few years, the Educational Alliance has increased its programs

focused on seniors and launched programs to help kids in their choices of school and colleges.

Diocelyn Batista was one of those kids. Born in the Dominican Republic, the 21-year-old moved with his family to the U.S. when he was 12 and didn’t speak much English. At 16 he started to study for the SAT at the Educational Alliance. His scores jumped 400 points.

Last June, Mr. Batista became the first member of his family to earn a college degree in the U.S. when he graduated from Vanderbilt University. He had been admitted with a four-year, all-expenses-paid scholarship that the Educational Alliance helped him apply and interview for. Mr. Batista currently works for City Year, a non-profit focusing on keeping students in school. He plans to apply to a Ph.D. program in sociocultural anthropology and to study rituals of religions. “I’m working my way up to be a dean, but I like research too,” he said.

He keeps visiting the Educational Alliance, where his 17-year-old sister is a senior in the College Prep program. Following her brother’s example was a no-brainer for the girl. “As a family we realized how much I got out of it,” Mr. Batista said.

On a wall in the temporary offices of the Educational Alliance, there is a plaque that someone found in a closet at 197 East Broadway. “Come to the Educational Alliance,” it reads. “We will help you to: Speak better English. Become a citizen. Find a job.”

In a century, the meaning of that sentence has not changed much, said Ms. Bernstein. “We don’t help anymore to pass the citizenship test," she said. “But we help people to become good citizens. Stressing how to be a part of a community and live as good citizens is a big part of what we do.”

A new events room will be on the sixth floor, left. Top, the Educational Alliance serves children and seniors.

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Culture / October 2012

Apps to WatchThe commercial real estate bankers and brokers we know are pretty well-versed on the latest in tech, since these tools have become such an important part of getting deals done. However, as the latest iPhone release proves, there’s always something new coming on the scene. Here, a look at a few apps for iPhone and Android that you may have overlooked.

1. LoopNet: Free for iPhone and Android, this app gives access to more than 800,000 searchable listings. In the iPad version only, it also offers millions of property records for finding historical listings, owner and tenant information, mortgage and lender history, tax records and much more.

2. 10BII Calc Financial Calculator: To really impress your client, here is a business calculator featuring over 100

built-in functions for business, finance, mathematics and statistics. It allows you to easily calculate loan payments, interest rates, amortizations, discounted cash-flow analyses and more. Downloadable for $1.99.

3. Real Capital Analytics: This app from the global research and consulting firm gives details on commercial property transactions from Manhattan to Moscow. The latest version offers additional loan information. And it’s free.

4. CamCard: No more lost business cards and missed deals. Ideal for an industry in which networking is everything, this app lets you scan, organize and read business cards. Don’t miss the special offer that makes the latest version available for just $2.99.

BlackBerry vs. iPhone

» Smartphones are obviously the most beloved gadget for businesspeople who need to communicate 24/7. Many prefer the BlackBerry for writing long e-mails, but pick the iPhone for its flexibility. At the end of the day, you can choose not to choose. In your pockets, there’s room for both.

Google Maps vs. Apple

» Those working in CRE are among the very disappointed users of the new Apple Maps in iOS 6, considered by most to be less accurate than the old Google Maps. Don’t despair, though. An iOS 6 Google Maps version for iPhone and iPad might be ready in a couple of months.

Websites & Software

» ACRIS New York City’s Automated City Register Information System (ACRIS) allows you to search property records and to view document images for all five boroughs.

»ACTOVIA This service makes it easy for commercial mortgage and real estate bro-kers to track mortgages and landlords in New York City.

» LOANCOMPS Chandan’s industry-first tool enables searching of new mortgages across lender types. This includes banks, life insurance agencies and conduits, as well as a variety of transaction types.

» PROPERTY SHARK Founded in 2002, this website provides property reports, pre-foreclosure and foreclosure listings, maps, building photos and sales and lease listings.

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The Sked / October 2012

The Sked: October3-4

If you’re looking to learn the ABCs of the construction process or just need a brush-up, head to the nation’s capital for this two-day intensive workshop.

Construction Fundamentals for Development Professionals; 1025 Thomas Je� erson Street NW, Suite 500 West, Washington, D.C., starts 8:30am on October 3. Contact [email protected] or visit www.uli.org for more information.

3-4 Chicago wasn’t nicknamed the Windy City for

nothing! Visit the Chicago Deal Making conference to get the lowdown on how to close that deal as 7,000 attendees blow into town for this two-day event.

ICSC 2012 Chicago Deal Making; Navy Pier, 600 East Grand Avenue, Chicago, Ill. Visit www.icsc.org online or call the ICSC Information Center at (646) 728-3800 for more information.

9-10 Summer may be over, but if you’d still like a good

workout, be sure to hit up this executive conference on real estate workouts. Sessions include tips on selling assets in a bankruptcy setting and a look at the regulatory environment.

IMN’s Second Annual Bank & Financial Institutions Special Assets Executive Conference on Real Estate Workouts; Hyatt Regency Chicago, Chicago, Ill. Visit www.imn.org or call Andy Melvin at (212) 901-0542 for more information.

10No, the Future of Multifamily Finance Reform

is not about restructuring alimony from your previous marriages. Fannie Mae’s Caroline Blakely, MetLife’s Mark Wilsmann and Freddie Mac’s David Brickman participate in this after-work seminar.

CRE Finance Council: The Future of Multifamily Finance Reform; O� ces of CRE Finance Council, 900 Seventh Street NW, Meeting Level (ML), Washington, D.C., 5:30-7:00pm. Visit www.crefc.org for more information.

17The latest James Bond installment doesn’t hit

theaters until next month. Until then, other bonds take center stage at the Fourth Annual Covered Bonds Conference.

IMN’s Fourth Annual Covered Bond Conference; New York Marriott Downtown, New York, N.Y. Call Jade Friedensohn at (212) 901-0560 or visit www.imn.org for more information.

18 Can’t get enough of The Mortgage Observer? We

can sympathize. Come listen to editor Carl Gaines

moderate a panel discussion about commercial lending at the NYC Real Estate Expo.

NYC Real Estate Expo 2012: Commercial Lending in Today’s Market; Columbia University, 2920 Broadway, 704 Alfred Lerner Hall, New York, N.Y., 1:30pm. Visit www.nycrealestateexpo2012.eventbrite.com for more information.

21-23Focus on the securitization market from a hotel

with views of the ocean. Conference tracks include “Microfi nance and Securitization” and “Assessing Credit Risk in the RMBS Sector.”

18th Annual ABS East 2012: Investor Focused. Investor Driven; Fontainbleau, Miami Beach, Fla. Visit www.imn.org for more information.

21-24This event is one not to miss, as Bill Clinton—

founder of the William J. Clinton Foundation and 42nd president of the United States—stars as a keynote speaker. Former New York Mayor Rudy Giuliani will be there too.

MBA’s 99th Annual Convention & Expo 2012; Hyatt Regency Chicago, Chicago, Ill. Visit www.mortgagebankers.org.

The Sked: October

This event is one not to miss, as Bill Clinton—founder of the William J. Clinton Foundation and

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32

Of Interest / October 2012 An index of all the people, places, addresses and companies mentioned in this issue

5 30 12 05 27

10BII Financial Calculator � � � � � �2811 East 31st Street� � � � � � � � � � � � � � � � � 815 Central Park West � � � � � � � � � � � � � 4100 Passaic Avenue (Fairfield, N�J�) � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 5197 East Broadway � � � � � � 24, 26, 271025 Thomas Jefferson Street NW (Washington, D�C�) � � � � � � � � � � � � � �301100-114 Kings Highway� � � � � � � � � 101875-1925 Nostrand Avenue � � � � � 6270 Park Avenue � � � � � � � � � � � � � � � �222067-73 Coney Island Avenue � � �102091-97 Coney Island Avenue � � �102920 Broadway � � � � � � � � � � � � � � � � � �30393 West End Avenue Holdings, LLC � � � � � � � � � � � � � � � � � � � � 8450 Lexington Avenue � � � � � � � � � � � 450 East 69th Street � � � � � � � � � � � � � � � 5540 Atlantic Avenue� � � � � � � � � � � � � � 5 600 East Grand Avenue (Chicago, Ill�) � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �30669 River Drive (Elmwood Park, N�J�) � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 57698 Sam Snead Highway (Hot Springs, Va�) � � � � � � � � � � � � � � � � � � � � � � 6900 Seventh Street NW (Washington, D�C�) � � � � � � � � � � � � � �30

AA10 Capital � � � � � � � � � � � � � � � � � � � � � � 18Accordia Realty Ventures, LLC � � 5Acris � � � � � � � � � � � � � � � � � � � � � � � � � � � � �28Actovia� � � � � � � � � � � � � � � � � � � � � � � � � � �28Allstate Life Insurance Company � � � � � � � � � � � � � � � � � � � � � 5American Realty Capital � � � � � � � � 10Android � � � � � � � � � � � � � � � � � � � � � � � � � �28Apple� � � � � � � � � � � � � � � � � � � � � � � � � � � � �28Apthorp� � � � � � � � � � � � � � � � � � � � � � � � � � � 8Atlantic Assets Group � � � � � � � � � � � 18Atlantic Assets Summit � � � � � � � � � 18Atlantic Terminal� � � � � � � � � � � � � � � � � 5Atlantic Yards� � � � � � � � � � � � � � � � � � � � � 5Aviva Investors � � � � � � � � � � � � � � � � � � 18

BBaker, Jeffrey � � � � � � � � � � � � � � � � � � � � 12Bank of America � � � � � � � � � � � � � � 5, 26Barclays Center� � � � � � � � � � � � � � � � � � � 5Bar-Or, Tal� � � � � � � � � � � � � � � � � � � � � � � 10 Batista, Diocelyn � � � � � � � � � � � � � � � �27Berman, Michael � � � � � � � � � � � � � �8, 10Bernstein, Robin � � � � � � � � � � � � 24, 27Best Buy � � � � � � � � � � � � � � � � � � � � � � � � � � 4Betesh, Morris� � � � � � � � � � � � � � � � � � � � 6Blackstone� � � � � � � � � � � � � � � � � � � � � � � � 4BlackBerry� � � � � � � � � � � � � � � � � � � � � � �28Blakely, Caroline � � � � � � � � � � � � � � � �30Blankfein, Lloyd � � � � � � � � � � � � � � � � � � 4Bogart, Jason � � � � � � � � � � � � � � � � � � � � � 5

Bond, James � � � � � � � � � � � � � � � � � � � � �30Brickman, David� � � � � � � � � � � � � � � � �30Brooklyn Navy Yard Development Corporation � � � � � �26Brooks, Al� � � � � � � � � � � � � � � � � � � � � � � �22Byrne, David� � � � � � � � � � � � � � � � � � � � � 18

CCamCard � � � � � � � � � � � � � � � � � � � � � � � �28Cantor, Manny � � � � � � � � � � � � � � 26, 27Cassidy Turley� � � � � � � � � � � � � � � � � � � � 8CBRE � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 8Center for Specialty Care� � � � � � � � � 6Chandan � � � � � � � � � � � � � � � � � � � � � � � � �28Chandan, Sam � � � � � � � � � � � � � � � � � � � 17Chase Commercial Term Lending � � � � � � � � � � � � � � � 21, 22Chobani� � � � � � � � � � � � � � � � � � � � � � � � � �26Citigroup � � � � � � � � � � � � � � � � � � � � � � � � 18Clinton, William J� � � � � � � � � � � � � � �30Cohen, Jason � � � � � � � � � � � � � � � � � � � � � 5Columbia University � � � � � � � � � � � �30Commercial Mortgage Capital � � � 5Cooper, Jeff � � � � � � � � � � � � � � � � � � � � � � 12CRE Finance Council � � � � � � � � � � �30Cube Capital� � � � � � � � � � � � � � � � � � � � � � 8Cushman & Wakefield� � � � � � � � �6, 12CWCapital� � � � � � � � � � � � � � � � � � � � �8, 10CW Financial Services � � � � � � � � �6, 8

DDashevsky, Bruce� � � � � � � � � � � � � � � � 18David Polk & Wardwell� � � � � � � � � � � 5DebtX � � � � � � � � � � � � � � � � � � � � � � � � � � � � 10Deutsche Bank � � � � � � � � � � � � � � � � � � 18DIG EH Hotel LLC � � � � � � � � � � � � � � � 5Dominican Republic � � � � � � � � � � � �27Dubai Investment Group� � � � � � � � � 5Dubrowsky, Andre� � � � � � � � � � � � � �6, 8Dunn, Jerry� � � � � � � � � � � � � � � � � � � � � � 18

EEastdil � � � � � � � � � � � � � � � � � � � � � � � � � � � 12Economic Development Corporation � � � � � � � � � � � � � � � � � � � � � 18Edelstein, Mark � � � � � � � � � � � � � � � � � � 5Educational Alliance � � � � 24, 26, 27Ely, Ed � � � � � � � � � � � � � � � � � � � � � � � � � � �22Emmes Asset Management � � � � � � 6Essex House Hotel � � � � � � � � � � � � �4, 5Eurohypo � � � � � � � � � � � � � � � � � � � � � � � � � 4Extell Development � � � � � � � � � � � � �22

FFannie Mae � � � � � � � � � � � � � � � � � � � � � �30Federal Housing Administration � � � � � � � � � � � � � � � � � � 17First New York Realty � � � � � � � � � � � 18

Fortress Investment Services � � � � 8Freddie Mac � � � � � � � � � � � � � � � � � � � � �30Friedensohn, Jade � � � � � � � � � � � � � � �30Fulp, Sean� � � � � � � � � � � � � � � � � � � � � � �6, 8

GGalin, Scott � � � � � � � � � � � � � � � � � � � � � � 18Gallagher, Michael � � � � � � � � � � � � � � 18Garfield, Spencer � � � � � � � � � � � � � � � � � 5Garrish, Robert � � � � � � � � � � � � � � � � � � � 8GE Capital � � � � � � � � � � � � � � � � � � � � � � � 18Geller, Laurence � � � � � � � � � � � � � � � �4, 5George Washington Bridge� � � � � � 12Giuliani, Rudy � � � � � � � � � � � � � � � � � � �30Glen, Alicia � � � � � � � � � � � � � � � � � � 24, 27Goldman Sachs � � � � � � � �4, 24, 26, 27Google � � � � � � � � � � � � � � � � � � � � � � � � � � �28Granite� � � � � � � � � � � � � � � � � � � � � � � � � � � 12Greenbaum, Samuel� � � � � � � � � � � � �27Greenbrook Executive Center � � � 5Greenland, Kingsley� � � � � � � � � � � � � 10Gross, Michael� � � � � � � � � � � � � � � � � � � � 4Groupe BPCE� � � � � � � � � � � � � � � � � � � � 18

HHackney, Beacher � � � � � � � � � � � � � � � � 6Hall, Marc � � � � � � � � � � � � � � � � � � � � � � � 18Handler Real Estate Organization � � � � � � � � � � � � � � � � � �18Hegset, Michael � � � � � � � � � � � � � � � � � � 8Hermance, Ronald Jr� � � � � � � � � � � � 10Herrick, Feinstein LLP � � � � � � � � � � 18Hoit, Gentry Ashmore� � � � � � � � � � � 18Homestead � � � � � � � � � � � � � � � � � � � � � � � 6Hudson City Bancorp � � � � � � � � � � � 10Hudson Realty Capital � � � � � 5, 8, 18Hyatt Regency Chicago � � � � � � � � �30

IICSC � � � � � � � � � � � � � � � � � � � � � � � � � � � � �30IMN� � � � � � � � � � � � � � � � � � � � � � � � � � � � � �30International Gem Tower � � � � � � �22iPhone � � � � � � � � � � � � � � � � � � � � � � � � � � �28iPad � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �28Iran � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 5

JJay-Z � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 5JPMorgan Chase � � � � � 18, 26, 21, 22JW Marriott Essex House Hotel� � � 4

KKane, David� � � � � � � � � � � � � � � � � � � � � � 18Kelso, Jared� � � � � � � � � � � � � � � � � � � � � � � 6Key Food� � � � � � � � � � � � � � � � � � � � � � � � � � 6KSL Capital Partners� � � � � � � � 4, 5, 6

LLakeland Bank� � � � � � � � � � � � � � � � � � � � 5Lashine, Nancy � � � � � � � � � � � � � � � � � � 18Leibowitz, Paul � � � � � � � � � � � � � � � � � � � 8Lehman Brothers� � � � � � � � � � � � � � � � � 4LoanComps� � � � � � � � � � � � � � � � � � � � � �28Loo, David � � � � � � � � � � � � � � � � � � � � � � � 18LoopNet � � � � � � � � � � � � � � � � � � � � � � � � �28Lower Eastside Girls Club� � � � � � �26

MMacy’s � � � � � � � � � � � � � � � � � � � � � � � � � � �27Majeski, Moshe� � � � � � � � � � � � � � � � � � � 6Marriott International � � � � � � � � � � � 5Massey Knakal Capital Services � � � 5Maturo, Michael� � � � � � � � � � � � � � � � � � 4McKissack, Cheryl� � � � � � � � � � � � � � � 18McKissack & McKissack � � � � � � � � 18McNulty, Dan� � � � � � � � � � � � � � � � � � � � � 8Melvin, Andy � � � � � � � � � � � � � � � � � � � �30Meridian Capital Group� � � � � � �6, 10MetLife Capital� � � � � � � � � � � � � � 18, 30Meyers, Matt � � � � � � � � � � � � � � � � � � � � 18Morgan Stanley� � � � � � � � � � � � � � � �4, 18Morgan Stanley Smith Barney � � � 4Morrison & Foerster � � � � � � � � � � � � � 5Mortgage Bankers Association� � � 8M&T Bank � � � � � � � � � � � � � � � � � � � � � � � 10

NNational Historic Landmark � � � � � 6Natix North America � � � � � � � � � � � � 18Newman, Greg� � � � � � � � � � � � � � � � � � �22New York Marriott Downtown� � � � � � � � � � � � � � � � � � � � � � �30Nomura Securities � � � � � � � � � � �12, 18

OOne57� � � � � � � � � � � � � � � � � � � � � � � � � � � �22

PPapa John’s Pizza� � � � � � � � � � � � � � � � � 6Park Madison Partners� � � � � � � � � � 18Pendergist, Jason� � � � � � � � � � � � �21,22People’s United Bank� � � � � � � � � �6, 10Print, Keith � � � � � � � � � � � � � � � � � � � � � � � 5PropertyShark� � � � � � � � � � � � � � � � � � �28Prudential Real Estate Investors � � � � � � � � � � � � � � � � � � � � 18

RReal Capital Analytics � � � � � � � � � � �28Rechler, Scott � � � � � � � � � � � � � � � � � � � � � 4Richmond Times Dispatch� � � � � � � 6Rickland Orchards � � � � � � � � � � � � � � � 5River Drive Center II � � � � � � � � � � � � � 5Rockwood Real Estate Advisor 6, 8

Romano, Joseph� � � � � � � � � � � � � � � � � � 5RXR Realty � � � � � � � � � � � � � � � � � � � � � � � 4

SSchiff, Jacob H� � � � � � � � � � � � � � � � � � �27Scott, Mark � � � � � � � � � � � � � � � � � � � � � � � 5Siegal, Diane Rau � � � � � � � � � � � � � � � � 18Simon Development Group � � � � � � 8Shalom, Isaac and Billy � � � � � � � � � � � 6Shanahan, Bill � � � � � � � � � � � � � � � � � � � � 8Simon, Jonathan � � � � � � � � � � � � � � � � � 8Skadden, Arps, Slate, Meagher & Flom � � � � � � � � � � � � � � � 18Smith, James W� � � � � � � � � � � � � � � � � � 6Smith, Geoffrey� � � � � � � � � � � � � � � �8, 18Smith, Leigh Ann � � � � � � � � � � � � � � � �26Stacom, Darcy � � � � � � � � � � � � � � � � � � � � 8State University of New York� � � � 18Stein, Joshua � � � � � � � � � � � � � � � � � � � � 16Sterling Parc � � � � � � � � � � � � � � � � � � � � � � 5Sterling Properties � � � � � � � � � � � � � � � 5Stern, Robert A�M� � � � � � � � � � � � � � � � 4St� John’s University� � � � � � � � � � � � � 18Straus, Isidor � � � � � � � � � � � � � � � � � � � �27Strategic Hotels & Resorts � � � � �4, 5Subway � � � � � � � � � � � � � � � � � � � � � � � � � � � 6

TTemple, Jeffrey � � � � � � � � � � � � � � � � � � � 5Thelander, Garrett � � � � � � � � � � � � � � � 5

UUniversity of Colorado � � � � � � � � � �22Uris, Harvey � � � � � � � � � � � � � � � � � � � � � 18U�S� Bank� � � � � � � � � � � � � � � � � � � � � � � � �26

VVanderbilt University � � � � � � � � � � �27

WWalker, Willy � � � � � � � � � � � � � � � � � � � � � 8Walker & Dunlop � � � � � � � � � � � � � �8, 10Warburg Pincus � � � � � � � � � � � � � � � � � � 4Washington Mutual � � � � � � � � � � � � �22Weinstock, Avi� � � � � � � � � � � � � � � � � � � � 6Wells Fargo � � � � � � � � � � � � � � � � � � � � � � � 4West Elm � � � � � � � � � � � � � � � � � � � � � � � � � 4West, Suzanne � � � � � � � � � � � � � � � � � � � 18Wharton School � � � � � � � � � � � � � � � � � 12Wilmers, Robert � � � � � � � � � � � � � � � � � 10Wilmington Trust � � � � � � � � � � � � � � � 10Wilsmann, Mark � � � � � � � � � � � � � � � �30Wohl, Russell � � � � � � � � � � � � � � � � � � � � 18

ZZeckendorf, Arthur and William Lie � � � � � � � � � � � � � � � � � � � � � � � 4

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