Yonkers-based AVR Realty has hired CB Richard Ellis with an eye towards putting 5 Times Square on the market, according to the Wall Street Journal. AVR bought the 1.1 million-square-foot building, which houses the U.S. headquarters of Ernst & Young, at the height of the market in 2007 for $1.28 billion.
Stephen Siegel, the firm’s global chairman, said that AVR will decide whether or not to market the building this fall. “It’s a fabulous asset, a magnificent building where there’s very limited risk,” he said.
If sold for a profit, the sale of 5 Times Square could be an indication that trophy commercial buildings are once again trading at record prices, the Journal said. “The sales market is picking up, and the question is: Does it keep going?” Siegel said.
AVR bought the building from Boston Properties for $1,162 per square foot in 2007, but CEO Allan Rose later admitted that it may have paid too much. “Everybody was in that irrational exuberance in those days and we probably paid too much for the building,” he said in a 2009 interview. [more]

Wells Fargo is shoring up its staffers on the commercial mortgage-backed securities front in anticipation of a resurgence of the market, bank representatives told Bloomberg news. The CMBS market was previously led by Wachovia, which was acquired by Wells Fargo in 2008 for $12.7 billion after it reported more than $2.1 billion in CMBS-related losses in 2007 and 2008. Among Wachovia’s soured deals was the $7.9 billion bond that included financing for the 2006 purchased of Stuyvesant Town and Peter Cooper Village — the largest CMBS deal in history. The buyers handed over the keys to the complex earlier this year after defaulting on their mortgage. But that’s not deterring Wells Fargo, which has added more than 20 bankers and support employees over the past three months. The new staffers are helping to increase loan originations and bundle them into CMBS, said Ed Blakely, the bank’s head of commercial mortgage lending and servicing. And Wells Fargo isn’t alone. Australian investment bank Macquerie Group announced last month that it is targeting the U.S. CMBS market with a new group, and New York-based Cantor Fitzgerald said earlier this month that it plans to originate and securitize $5 billion in loans over the course of the next year. [Bloomberg]

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It may be hard to believe, but lenders are now actually sending letters of intent to provide construction financing. Construction financing, perhaps the riskiest type of mortgage financing, is available in the tri-state region for rent-regulated and other multi-family buildings. It even exists for condominium projects (and yes, I did say “condominium”).

Gino Martocci, president of the New York City and Long Island region of M&T Bank, said: “We have and continue to provide construction financing for well-capitalized clients. We are in the process of providing construction financing for a brand new hotel in the Union Square neighborhood.” Another established developer who prefers to remain anonymous, who is in the process of building a rental building off Fifth Avenue on the Upper East Side, told me that 10 financial institutions have expressed interest in the development. [more]

The retail space at 40 Mercer, the Jean Nouvel-designed condo developed by Hines Interests and Andre Balazs, has sold for $41.9 million to a company called GLL Real Estate Partners, city records show. The space, which has a street address of 465 Broadway, contains 9,400 square feet of space at the ground level. When it hit the market in June 2008, it was leased to high-end retailers Bose, Dermalogica and Vivienne Tam and to a Wachovia Bank. Studley’s Woody Heller reportedly had the listing, and at the time, he predicted that the retail condo would go for roughly $50 million. He declined to comment to the Observer yesterday. [NYO]

Tishman Speyer and BlackRock have 10 days to make a payment on their troubled Stuyvesant Town and Cooper Village complex before lenders step in to foreclose, sources told Bloomberg. The owners missed a $16.1 million payment on the property last week, putting them in technical default, and as a result, a group of senior mezzanine debt holders, led by Winthrop Realty Trust, said in a letter that it would pursue “rights and remedies,” including a possible foreclosure sale. The group holds $300 million in debt on the property and could act within 90 to 180 days. Tishman Speyer and BlackRock Realty purchased Stuyvesant Town, the city’s largest apartment complex with 11,200 units, for $5.4 billion in 2006, investing $112.5 million each. It was valued at just $1.8 billion in October. The $3 billion mortgage from Wachovia Bank was packaged and sold as securities to several investors including Fannie Mae, Freddie Mac and the Government of Singapore Investment Corporation, which has already reported losses in the aftermath of last week’s default. [Bloomberg]

From left: SL Green’s Andrew Mathais, Roger Cozzi of Gramercy Capital, Alex Sapir of the Sapir Organization and 100 Church Street

Five months after taking back 100 Church Street from the Sapir Organization, SL Green and Gramercy Capital won the auction this morning to take over the Lower Manhattan office tower for only $10,000, as investors grew leery of millions of dollars in debt and empty space at the troubled office tower.

SL Green, the former owner of Gramercy Capital and a current investment partner, will share 50-50 ownership of 100 Church. SL Green took over management and leasing of the building in August, according to sources, and will remain in that role.

The new owners must also work out the defaulted senior debt, a $145 million senior mortgage from Wachovia Bank.

SL Green President Andrew Mathias, in an October conference call with investment analysts, said he expected the company to acquire additional properties through similar mezzanine auctions.

“As we have indicated on prior calls, we expect this market environment to produce additional opportunities within our mezzanine portfolio like 100 Church, giving us opportunity to grow our portfolio with quality assets at an attractive basis,” Mathias said on the call, according to a transcript by Seeking Alpha. [more]

Boutique investment banks are expanding or popping up anew to fill a void in capital created by the real estate crash that left property owners and investors without many options for the impending $1.5 trillion in real estate loans expected to mature over the next five years. Firms like Moelis, Cantor Fitzgerald and Broadpoint Gleacher Securities Group are carving out a niche in helping their clients find a way out of bad debt by restructuring loans, finding capital and selling off assets. Newcomers to the market say their lack of “baggage” of the kind plaguing big institutions like Credit Suisse and others who were intimately involved in subprime lending, coupled with their small size, will prove advantageous. Many of the boutique firms are staffed with ex-Lehmanites, former Wachovia bankers, or other refugees of past main players, though, and these new firms are quickly expanding. Moelis has hired 100 new staffers over the past year, many of whom will help with its new real estate services, and brokerage CB Richard Ellis recently expanded its investment banking business, based in London, to America. [Crain’s]