Lightstone getting in on the lending game

Firm is launching Lightstone Capital to finance projects in NYC, LA and Miami

TRD New York /
Jan.January 17, 2019 01:00 PM

Mitchell Hochberg and David Lichtenstein

Lightstone Group is joining the ranks of real estate companies launching their own debt platforms.

The firm announced Thursday that it is setting up Lightstone Capital, which will aim to address inefficiencies and roadblocks that borrowers are dealing with in the current market. Lightstone hopes to close at least $500 million worth of transactions in its first year.

Lightstone president Mitchell Hochberg said the company wanted to launch the new platform to take advantage of its experiences on the equity side of real estate. He added that their experience buying debt would let them evaluate complicated transactions better than traditional lenders.

“We’re able to, as an owner/developer, evaluate complex deals in a way that many other lenders are not able to do,” he said.

The platform will specialize in mezzanine and first-lien loans for construction and bridge financing projects. Its target loans range in size from $3 million to $100 million in markets including New York, Miami and Los Angeles. The firm will consider strong projects in smaller markets as well.

Eugene Rozovsky, formerly of Madison Realty Capital, will oversee Lightstone Capital, which is already working on its first handful of loans.

Multiple other real estate companies have recently made similar moves. Slate Property Group and The Carlyle Group recently launched a new $750 million lending company called SCALE Lending, and Silverstein Properties launched Silverstein Capital Partners last year to provide real estate loans. And Madison Realty Capital has been lending for years.

Hochberg said more development companies were looking to do this in order to diversify their businesses.

“When you look at the risk adjusted returns in the equity markets today that are on the debt side, there are some very compelling opportunities,” he said, “and I think it just makes a lot of sense for all of us to do that.”

Lightstone recently purchased the future site of the Lower East Side’s Moxy Hotel at 151-153 Bowery and 331-337 Broome Street for $56.6 million. The firm also received a $113 million loan from Goldman Sachs for its 430-unit rental project in Gowanus at 365 Bond Street, one of the largest outer borough loans in December.


Related Articles

arrow_forward_ios
With a cooling trade war, stocks perform well, including real estate. (Credit: iStock)

Real estate stocks push up this week as U.S.-China trade tensions ease

Real estate stocks push up this week as U.S.-China trade tensions ease
416 West 25th Street and Maverick Real Estate Partners principal David Aviram (Credit: Google Maps and LinkedIn)

Chelsea landlord claims “predatory” lender is charging a crippling interest rate as punishment after losing foreclosure case

Chelsea landlord claims “predatory” lender is charging a crippling interest rate as punishment after losing foreclosure case
Matt Borstein, Deutsche Bank’s global head of CRE, is moving to Oak Hill Advisors (Photo via Deutsche Bank)

Deutsche Bank’s CRE head moves to Oak Hill Advisors

Deutsche Bank’s CRE head moves to Oak Hill Advisors
Bank OZK CEO George Gleason (Unsplash; Bank OZK)

Bank OZK’s lending up in third quarter

Bank OZK’s lending up in third quarter
WeWork CEO Sandeep Mathrani (Wikipedia Commons; iStock)

WeWork bonds, already junk, downgraded by Fitch

WeWork bonds, already junk, downgraded by Fitch
(Getty, iStock)

Cash-strapped borrowers are increasingly giving keys back to lenders

Cash-strapped borrowers are increasingly giving keys back to lenders
Craig Solomon

The REInterview: Square Mile’s Craig Solomon on his big bet on studio space, today’s capital stack and the dangers of socialism

The REInterview: Square Mile’s Craig Solomon on his big bet on studio space, today’s capital stack and the dangers of socialism
529 Fifth Avenue and Silverstein Properties' Larry Silverstein (Google Maps; Getty)

Silverstein gets $171M refi for 529 Fifth Avenue

Silverstein gets $171M refi for 529 Fifth Avenue
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...