1633 Broadway

There were a record number, $13.3 billion worth, of national office recapitalizations last year, according to data from Real Capital Analytics cited by the Wall Street Journal, underscoring the huge debt piles accumulated by landlords during the pre-recession property boom.

“There were a lot of white knights coming to help recapitalize” buildings that had mortgage loans coming due last year, said Dan Fasulo, managing director at RCA. Recaps were at their highest level since RCA began tracking the numbers, even surpassing the last peak, in 2007, of $11 billion. [more]

From left: Sheldon Solow and 9 West 57th StreetDeveloper Sheldon Solow has obtained a $625 million loan on 9 West 57th Street from Deutsche Bank, which beat out AIG and JPMorgan Chase to provide financing for the trophy property, Bloomberg News reported.

The loan refinances debt set to mature in February that Solow took out at the height of the bubble in 2007. About $55 billion of property loans are set to come due in 2012, and $19 billion of them were originated at the height of the bubble. But most of them will struggle to refinance, Standard & Poor’s predicted, as property values have decreased about 42 percent from the peak.

In this case, several parties competed for Solow’s refinancing because of the location and prestige of the building, exemplifying the demand for prime buildings, Bloomberg said. [more]

At Facebook.com’s new Silicon Valley headquarters in Menlo Park, Calif., employees roam the halls with laptops, discuss the company’s newest features from comfy sofas scattered throughout the building and even draw diagrams on the walls on the complex. The building, which was recently renovated for $250 million in a “hacker” style, may provide an inspiring model for new “cool” and “creative” office complexes across the country, Bloomberg News reported, and even in New York.

Nondescript properties with tall ceilings and few interior walls are ideal for Internet firms to take over, Bloomberg said, and are becoming increasingly popular in gateway U.S. cities.

“Creative space” is outperforming other property types, said Dan Fasulo, managing director of Real Capital Analytics.  [more]

An L-shaped Lower East Side parcel zoned for 70,000 square feet of residential development has hit the market, Crain’s reported, and bids are due tomorrow.

The site has frontage on both East Houston and Suffolk streets, but wraps around the land on that corner, with the addresses 255 East Houston Street and 171 Suffolk Street.

The lots were purchased by the Mahfar family for $7.7 million, according to public records, and are being marketed by Cushman & Wakefield. [more]

As $17.5 billion in securitized loans backed by U.S. lodging properties mature in the next 18 months, lenders are quickly making agreements on distressed loans, working harder to avoid foreclosure on hotel properties than on any other commercial assets, Bloomberg News reported.

Data from Real Capital Analytics shows that workout agreements have been reached on 53 percent of distressed hotel loans since the beginning of 2008, more than on any other type of property. The reason, some experts speculate, may be that hotels are effectively rented by the night, and contracts with hotel operators may be terminated if a property is foreclosed on, making it harder to run or sell. [more]

From left: Siraj Dadabhoy, principal of Aion, David Schectman, principal at Eastern Consolidated, 57-63 Greene Street and 21-25 Mercer Street

New York real estate investment fund Aion Partners is marketing two Soho retail condominiums in an effort to capitalize on demand for these types of properties in key locations, Crain’s reported.

The company has listed a 13,700-square-foot condo at 57-63 Greene Street and another at 21-25 Mercer Street, the latter which includes a residential condo unit and three stores. Tenants at the first property include Bang & Olufsen, Cyrus Co. and Raul Carrasco and at the second, Nike, Toto and Surface to Air.

“The tenants are paying at least 40 percent below current rents so there is a great opportunity for upside,” said David Schechtman, a principal at Eastern Consolidated, who is handling the sales. “But you also have solid cash flow.” The asking prices for the properties are $19 million and $20 million, respectively. [more]

Anglo Irish Bank protestFrom the October issue: The auction of Anglo Irish Bank’s troubled $9.5 billion U.S. loan portfolio has surprised some industry observers — and spread fear among some borrowers, who worry about having new lenders take over their troubled projects.

Ben Thypin, a senior market analyst at Real Capital Analytics, said the fact that three lenders divvied up Anglo Irish’s portfolio was” not particularly unexpected.”

“No one but a bank could really afford to buy the performing loans, so the performers and non performers inevitably went to different buyers,” he said.

But what was surprising was who ended up at the winners’ table — Lone Star Funds acquired about $5 billion in sub- and nonperforming loans, while Wells Fargo and JPMorgan Chase acquired the remaining performing loans in separate transactions.
[more]

Building a hotel in New York City may be cheaper than purchasing one, Bloomberg News reported, as demand from investors helps drive hotel property prices through the roof. According to hotel consultancy firm Lodging Econometrics, New York developers are planning to open around 50 new hotels in the city before 2013 and 68 more by 2014.

“Right now, it can be cheaper to build,” Bruce Ford, senior vice president of sales at Lodging Econometrics, told Bloomberg. “Most developers would argue that it’s better to open a hotel in 2013 than in 2012, but in New York City, a market that leads the cycle, next year should be good.” Manhattan hotels have sold for an average of $505,157 per room so far in 2011, up from $344,799 in 2010 and $413,644 in 2009, according to data from research firm Real Capital Analytics. [more]

New York-based real estate investment trust Gramercy Capital’s shares rose by as much as 14 percent after the company agreed to settle $549.7 million in mortgage debt by giving control of many of its buildings over to lenders, Bloomberg News reported.

Around 317 commercial properties were surrendered yesterday to lender KBS Debt Holdings in an initial transfer, Gramercy said in a statement.

“What remains of Gramercy may be an attractive acquisition target both for buyers of discounted financial assets and someone looking to acquire a public real estate platform,” Ben Thypin, director of market analysis for New York-based Real Capital, told Bloomberg. [more]

Large Manhattan investment sales remained strong in July even as national market sales fell by more than half compared with the prior month, new figures from Real Capital Analytics show.

July investment sales for properties above $2.5 million declined in Manhattan by 10 percent to $2.46 billion, from $2.74 billion in June, data from Real Capital Analytics shows (see chart). Deals such as Colorado-based real estate investment trust UDR closing on the $443 million purchase of the Rivergate apartment building at 606 First Avenue in Murray Hill kept the July volume in Manhattan near where it was in June. [more]