Leo Tsimmer’s Caerus Group secured $50 million in financing from mortgage REIT Apollo Commercial Real Estate Finance to fund its acquisition of two Midtown office buildings at 4 and 10 East 34th Street, according to property records filed with the city Thursday.
The Midtown-based investment firm finally closed on 4 East 34th Street for $38.2 million last month, after entering contract to acquire the five-story, 29,000-square-foot office-and-retail property from the Zionist Organization of America — which used the building as its headquarters – in December 2014.
Caerus also picked up the adjacent 10-story, 55,000-square-foot Ditson Building at 10 East 34th Street from Brause Realty for $51.7 million in February.
Tsimmer’s firm is funding its purchase of both buildings, worth a combined $89.9 million, with the loan from Apollo, records show. The real estate investment trust managed by an indirect subsidiary of private equity giant Apollo Global Management.
Tsimmer confirmed the financing, telling The Real Deal that Caerus intends to use the proceeds for the “repositioning and stabilization of the properties.” While Apollo declined to comment, the firm announced last month that it had closed a $50 million mortgage loan “secured by two office buildings with ground-floor retail in Midtown Manhattan.”
Of the $50 million provided, $44.8 million was provided at closing, according to an Apollo release, which specified the financing as a floating rate loan with an initial two-year term and a six-month extension option.
Caerus’ deal for 4 East 34th Street was held up by litigation with a former retail tenant at the property, B. Bowman & Co. – the operator of women’s clothing store Bolton’s. That action was eventually dismissed, allowing Caerus to proceed with the acquisition.
Tsimmer’s firm also acquired additional air rights from properties surrounding 4 East 34th Street, and paid between $70 million to $80 million for both the building and additional development rights combined.
As for 10 East 34th Street, Caerus said in a statement announcing the acquistion in February that it “intends to reposition the asset as a boutique 60,000-square-foot office building.” The company noted the property’s “high-ceiling, floor-through office lofts” as features that make it “particularly appealing to media, technology and showroom tenants.”
Between its acquisition of both buildings and surrounding air rights, Caerus has in excess of 150,000 buildable square feet across the two properties.