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Real Estate Roundup 5.6.20

Rendering of St. John’s Terminal (Credit: Oxford Properties Group)

Real Estate Roundup:

Financing 

  • Oxford Properties and the Canadian Pension Plan Investment Board have closed on $972.6 million construction financing for their redevelopment of St. John’s Terminal. Google will be the sole tenant at the property. (CO)

Michael Shah’s Delshah Capital closed on a $174.3 million loan from Deutsche Bank to refinance the Park Hill apartment complex in Staten Island. The eight-building complex contains a total of 1,112 apartments, all of which are part of Section 8 housing.

  • Worth Noting: The funds will be used to pay down existing loans on the eight-building complex, leaving $62 million in excess credit, which will go toward pay bond payments in Tel Aviv, and for roughly $10 million of capital improvements. The mortgage has a three-year term and an interest rate of 260 basis points over LIBOR. (CO)

Leasing

  • Chipotle has signed a 10-year lease for 2,800 square feet on the ground floor of Rich International’s 885 10th Avenue in Hell’s Kitchen. The fast-food restaurant also signed a 15-year deal for 2,100 square feet at Friedland Properties’ 3781 Broadway in Washington Heights. (CO)

Tech 

  • Comedic relief from Adam Neumann’s lawsuit against Softbank: “The abuses committed by SoftBank and the Vision Fund are so brazen that they have prompted legal action by a special committee of WeWork’s board.” (Reuters)
  • Airbnb said it is slashing 1,900 jobs, or a quarter of its workforce, and cutting investments in non-core operations, as the home-sharing giant predicted the coronavirus pandemic would change its business even after more people start traveling again. (WSJ)

There will be opportunities…

In a complaint filed Thursday, Hidrock Properties accuses Henry Silverman’s 54 Madison Partners of an “improper and shameless attempt to capitalize on the Covid-19 pandemic” and take over the 161-key project at 12 East 48th Street, which is to become a Hilton Grand Vacation Club. Silverman’s firm allegedly announced an in-person “public” auction of the entity on Friday, May 1 — despite the ban on non-essential gatherings. A court order issued Friday has temporarily halted the sale.

  • Dig Deeper: 54 Madison provided $7 million in junior mezzanine debt in April 2019,, which required the project to be substantially complete by the end of 2019. Hidrock notes that construction was “more than 80 percent” done by Dec. 31, but the parties disagreed on whether that was enough. In early 2020, Hidrock began negotiations with Apollo Commercial Real Estate to refinance the property, and 54 Madison participated in those discussions. But then the pandemic threw a wrench into the machinery and on March 17 Apollo broke off negotiations. (TRD)

Restoration Hardware missed out on April rent at Delshah Capital’s 55 Gansevoort in the Meatpacking District. The 14-room, under-construction, boutique hotel is located around the corner from the company’s 90,000-square-foot flagship at 9 Ninth Avenue. Idea was for the hotel’s rooms and interiors to feature furnishings and fixtures from the upscale home furnisher, allowing guests to immerse themselves in the brand. The hotel is the only tenant in the five-story building, and was scheduled to open in the second half of 2020. Shares the publicly-traded company are down 32% year to date. (CO)

Other news

  • Count Warren Buffett among those questioning the future of offices… The Oracle of Omaha said during Berkshire’s annual meeting: “The supply and demand for office space may change significantly. A lot of people have learned that they can work at home, or that there’s other methods of conducting their business than they might have thought from what they were doing a couple of years ago. When change happens in the world, you adjust to it.”.(WSJ)
  • Only one luxury property went into contract in Manhattan last week, a stunning nosedive not seen since the last financial crisis… In the six weeks since New York’s stay-home order came into effect, there have been just 14 luxury contracts signed in Manhattan for a total value of $111 million. That’s compared with 135 contracts signed in the same time period last year, for a total value of more than $1 billion. (TRD+Olshan)

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