$ 730 million debt package finances a multitude of projects in New York
A subsidiary of Ladder Capital will oversee the sale of $ 730 million in secured loan bonds, some of which will help finance four midsize development projects in the city.
Of these, $ 55 million will go to billionaire Robert Mercer’s industrial project in Ridgewood, Queens, which he owns with his son-in-law George Wells and Ryder Washburn, a gun supplier film and television productions.
The trio bought 48-05 Metropolitan Avenue out of foreclosure in 2016 for $ 15.8 million, then invested $ 76 million in the construction of a 133,000 square foot industrial and office building, according to the agency. Morningstar rating and recording DBRS. Their loan will be used to find and fill tenants.
The building is 35 percent occupied by two tenants: the car rental company Picture Car Service, which leases 52,000 square feet and is affiliated with the owners, and Enterprise Rental Car. A stunt training rehearsal studio also lists the building as its address.
Cushman and Wakefield will market the property, which is a four out of 25 year tax rebate from the New York City Industrial Development Agency, according to Morningstar.
Secured Loan Bonds, or CLOs, are close cousins of commercial mortgage-backed securities. Rather than securitizing mortgages, as CMBS offerings do, CLOs sell private debt pools on transitional properties in the market and are viewed as riskier investments than mortgage backed securities.
Extell Development will use $ 44 million to refinance the debt at 17 West 60th Street, a 77,000 square foot building recently leased to Shefa School, a private Jewish day school. The building sat vacant for 10 years as Extell’s vision for a luxury condo development in Columbus Circle faded.
Shefa School will be responsible for the necessary substantial renovations. It has raised $ 65.7 million from city government bonds and will contribute $ 10.8 million in equity, per Morningstar. The 99-year ground lease will provide Extell with $ 2.6 million per year. The annual tuition fee at the school, founded in 2014, is $ 68,300.
As part of its CLO offer, Ladder Capital will sell a $ 30 million loan he brought in a joint venture of Angelo Gordon and Premier Equities to buy 2875 Broadway, a 31,000 square foot office building in Morningside Heights, this month for $ 35 million.
Columbia University left the building after completing its Manhattanville campus. The seven-story building is unoccupied, according to Morningstar. The property has 29,000 square feet of air rights available for sale or use to redevelop the site.
The Hudson Companies will use $ 24 million of Ladder’s debt package to refinance 315 Meserole Street, a 92,600 square foot commercial and office building in East Williamsburg. The building was about 29% occupied in July, according to Morningstar. Hudson Companies bought the warehouse there in 2016 for $ 27.8 million, then spent $ 24.4 million to convert it into an office complex.
Finding tenants for the building, which was delivered just before the pandemic, will be a test, given the city’s office market. A potential tenant has withdrawn interest in renting 15,000 square feet following mandatory pandemic closures, Morningstar reported.