David Werner lands $700M financing for Mobil Building acquisition

Meridian Capital, Eastdil arrange loan to purchase leasehold at 150 East 42nd St.

TRD New York /
Aug.August 27, 2014 03:42 PM

Real estate investors David Werner and Mark Karasick have secured the funds to complete their acquisition of the leasehold position in the iconic Mobil Building, The Real Deal has learned. Meridian Capital Group and Eastdil Secured arranged a $700 million loan for the 1.8 million-square-foot property at 150 East 42nd Street. The deal is one of the biggest financings of the year.

Meridian and Eastdil brought in Morgan Stanley Mortgage Capital Holdings to provide the 10-year, fixed-rate, interest-only CMBS loan. “Despite substantial liquidity in the CMBS market and broad competition for this credit, Morgan Stanley won this opportunity by leveraging its ability to advance a loan of this size and complexity with exceptional speed and efficiency,” a spokesperson for Meridian told TRD.

In April, a group led by Werner and Karasick went into contract for the leasehold position for more than $900 million, purchasing it from Hiro Real Estate, an entity controlled by the Honzawa brothers of Japan.

The leasehold acquisition was brokered by Eastdil’s Doug Harmon and Adam Spies. As part of the deal, the Goelet family, which holds the fee position, also extended the ground lease for another 99 years.

The 42-story, stainless-steel clad property, located between Lexington and Third avenues, is the New York headquarters of Wells Fargo. Mount Sinai Medical Center will soon move into 450,000 square feet in the tower’s base.

According to Real Capital Analytics data, the only larger financing deals this year are $1.45 billion for 388-390 Greenwich Street, a $900 million loan for the Grace Building and a $750 million credit for 277 Park Avenue, all CMBS debt.

Werner, who hails from Brooklyn’s Borough Park neighborhood, has shown a healthy appetite for acquiring trophy properties New York City in recent years. In June, he closed on the $1.5 billion acquisition of the 1 million-square-foot tower at 5 Times Square, which is the headquarters of Big Four accounting firm Ernst & Young. Karasick made a huge bet on Brooklyn’s Greenwood Heights in September, when he paid $91.5 million for a 690,000-square-foot industrial lot.

(Adam Pincus contributed reporting to this story.)

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