UPDATE, 10:04 a.m., September 16: Junior mezzanine positions on four of HFZ Capital’s New York condominium projects marketed through foreclosure sale, The real deal has learned, a possible sign of the troubled deals investors were anticipating.
Newmark Knight Frank Marketing Materials Reviewed by TRD show that four junior mezzanine loans are offered for a combined amount of $ 89.5 million through a UCC foreclosure sale. The loans are tied to four of HFZ’s luxury condos in Manhattan: 88-90 Lexington Avenue, The Astor at 235 West 75th Street, and Fifty Third and Eighth at 301 West 53rd Street.
CIM Group owns the mezzanine loans, sources close to the properties said. The company, led by Shaul Kuba, Avi Shemesh and Richard Ressler, is a developer and lender active in New York and Los Angeles, with majority stakes in several large condo projects.
The auction would give the successful bidder an “indirect interest” in all four properties, depending on the materials. Sources close to the deal confirmed the auction was scheduled but declined to comment further.
NKF representatives declined to comment. Representatives of HFZ could not be reached for comment.
Mezzanine loans take a junior position to senior loans in the capital stack, and generally carry higher interest rates. JPMorgan and Oaktree Capital conducted a $ 500 million in refinancing of the four buildings in 2016. The loans replaced the financing of Deutsche Bank in 2013.
In July 2013, HFZ, led by Ziel Feldman and Nir Meir, paid Westbrook Partners $ 610 million for the four properties, partnering with Fortress Investment Group for the purchase. The portfolio consisted of 743 rental units and the partners began the process of converting the buildings into residential condos.
HFZ Other major projects include the XI, a mixed-use condominium and hotel project near the High Line, and the Belnord, a multi-storey rental on the Upper West Side that the developer has converted into a high-line project. condominiums of 95 units.
Rich Bockmann contributed reporting.
This story has been updated to reflect the fact that CIM Group owns the junior mezzanine debt.