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Rebooting CMBS Team, UBS Recruits 5 Pros

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UBS has hired four loan originators and one underwriter as it continues to rebuild its commercial MBS team. Kevin Swartz, formerly of Wells Fargo and Morgan Stanley, signed up as a managing director and is due to start in a few weeks. The other originators Brian Selander, Doug Brandau and Jason Wilensky will move over from CIBC by the end of the summer as executive directors. And underwriter Francis Reyes started this month, with the title of director. Swartz and Wilensky will work in New York. Brandau and Selander are based in Salt Lake City, and Reyes is in Los Angeles. All five will work in the origination group led by Chris LaBianca, who joined UBS in May from RCG Longview of New York. The series of hirings follows the defections in April of former CMBS group head Ken Cohen and more than a dozen members of his team. Cohen ended up at Bank of America, where he took the reins of the CMBS group. Several of his former UBS staffers, led by Brett Ersoff and John Herman, went to Miami-based Rialto Capital to start a securitization lending group there. UBS promptly appointed longtime originator David Nass to replace Cohen as group head, and Nass brought LaBianca on board a few weeks later. Kathleen Gleason Donovan was promoted to head of underwriting. The bank joined with Deutsche Bank, Cantor Fitzgerald and KeyBank to price a $1.3 billion CMBS issue July 1, and is expected to bring out another conduit offering with Deutsche in September. Swartz spent the past two-and-a-half years at Wells as a managing...

Reiff to Lead Cerberus’ REO-to-Rental Shop

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Veteran lender Randy Reiff has left Macquarie to take the reins of a new finance company formed by Cerberus Capital. Reiff, formerly commercial MBS group head at Bear Stearns and J.P. Morgan, was named chief executive of First Key Lending, which will finance investors that buy distressed single-family homes in bulk and rent them out. Cerberus is backing the company with $2 billion of capital, according to people familiar with the matter. Reiff was most recently the head of commercial mortgage finance and CMBS at Macquarie. The Australian firm bought Reiffs advisory shop, Spartan Real Estate Capital, in 2010 and gave him the task of launching a real estate platform that originates whole loans and mezzanine loans, and also trades CMBS. Macquarie is looking for a replacement for Reiff through headhunter firm Russell Reynolds. The REO-to rental play is one of the hot strategies in real estate these days. Private equity shops, most notably Blackstone, have been scooping up portfolios of foreclosed properties at distressed prices with an eye toward renting them in the short term and cashing out at a profit later when housing prices rebound. Cerberus, which launched First Key in January, is targeting a niche: small to mid-size buyers that may not be big enough to obtain financing from Wall Street dealers. First Key will originate loans of $5 million to $100 million on relatively small portfolios of one- to four-family houses. The firms sweet spot will be portfolios of 10-25 homes, said a person knowledgeable about the...

Deutsche Lends $485 Million on 300 Park Ave.

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Deutsche Bank has written a $485 million fixed-rate loan for Tishman Speyer and Singapores sovereign wealth fund on the Colgate-Palmolive Building in Midtown Manhattan. Deutsche plans to securitize the 10-year mortgage in a stand-alone deal in September. That is one of only three single-borrower securitizations currently in the pipeline (see U.S. CMBS Deals in the Works on Page 8). The 773,000-square-foot building, at 300 Park Avenue, is 91.7 leased, according to CoStar. Colgate-Palmolive leases 57 of the space as its corporate headquarters. The rent roll also includes two financial-services firms: Greenhill amp; Co. (84,000 sf until 2020) and GTIS (41,000 sf until 2018). The building, constructed in 1955, is owned by Prime Plus Investments, which is controlled by the Singapore vehicle, GIC. New York-based Tishman bought into Prime Plus in 2004 with capital it had raised via an IPO by an Australian subsidiary. Prime Plus used some of the loan proceeds to retire a $135 million floater that Westdeutsche Immobilienbank wrote in 2010. WestImmo kept a portion and syndicated the rest to four other banks Credit Agricole, Helaba Bank, PB Capital and Wells Fargo. The 26-story building is between East 49th and East 50th Streets in the Plaza District submarket, across from the Waldorf-Astoria Hotel and about four blocks north of Grand Central Terminal. The building has a LEED silver certification.

Dealers Try to Push Key Spread Below 100 bp

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Commercial MBS paper continued to rally this week as dealers shopped a $1.2 billion conduit offering that could break through an important psychological price point. Lead managers Goldman Sachs, Citigroup and Jefferies were marketing the offerings long-term, super-senior class yesterday at 98-100 bp over swaps. No benchmark class has priced inside of 100 bp since early June. The new-issue benchmark spread had decreased to as low as 72 bp in January before reversing direction. Uncertainty about the Federal Reserves policies caused a big spike in June, when the spread blew out by almost 40 bp, to as high as 128 bp. Since then, spreads have retraced much of that spike, as fears abated that the Fed might soon cut back on its long-running efforts to keep a lid on interest rates. Last Friday, the benchmark class of a $1.1 billion deal (JPMBB 2013-C14) priced at 103 bp. Then, on Monday, the long-term super-seniors of another $1.1 billion issue (WFRBS 2013-C15) priced at 100 bp (see Initial Pricings on Pages 12-13). Now Goldman, Citi and Jefferies are trying to push the level below 100 bp on their transaction, expected to price Monday. The spread-tightening trend was also reflected by the price talk on subordinate classes. The guidance was 375-bp area on the bonds rated Baa3/BBB/BBB+ by Moodys, DBRS and Kroll. Thats down from 390 bp for comparable paper in the two previous deals and from this years high of 450 bp, set by deals that priced from late June to mid-July. The gap in yields on...

$3.5 Billion CMBS Deal to Precede Hilton IPO

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The bank syndicate that will lead Hilton Worldwides initial public offering will also float a $3.5 billion commercial MBS offering for the hotel chain. Deutsche Bank, Goldman Sachs, Bank of America and Morgan Stanley will likely bring the single-borrower transaction to market in the fourth quarter, according to people familiar with the plan. Hilton, which is owned by fund shop Blackstone, is expected to conduct the IPO in the first half of next year. The CMBS transaction is one component of a $13 billion debt package that Blackstone has lined up from the four banks in conjunction with the IPO. The other components include balance-sheet debt and high-yield unsecured bonds. The banks will likely retain some of the balance-sheet loans and syndicate the rest, lenders said. The CMBS offering will contain both fixed-rate and floating-rate tranches. Blackstone still hasnt selected which bank or banks will lead the deal. Hilton will use the proceeds of the debt package to retire existing debt. The McLean, Va., company operates 4,056 hotels with 668,285 rooms. Blackstone acquired Hilton for $26.2 billion at the top of the market, in 2007. A Bear Stearns syndicate provided $20.6 billion of debt financing $8.6 billion of senior debt and $12 billion of mezzanine debt. The other syndicate members were BofA, Goldman, Deutsche, Lehman Brothers, Merrill Lynch and Morgan Stanley. The lenders had intended to securitize the senior portion of the debt package, but got stuck holding it and much of the mezzan...

Blackstone Eyes Big Loan on Waldorf-Astoria

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Blackstone is close to arranging up to $550 million of floating-rate debt on the Waldorf-Astoria hotel in Midtown Manhattan. The low-leverage mortgage would be part of Blackstones massive recapitalization of the Hilton Worldwide hotel chain. The fund shop is aiming to take the company public next year. In conjunction with the IPO, Blackstone has already lined up a commitment for $13 billion in debt from four lenders: Deutsche Bank, Goldman Sachs, Bank of America and Morgan Stanley. That debt package will encompass $3.5 billion of commercial MBS floated via a stand-alone offering, as well as balance-sheet debt and high-yield unsecured bonds. Now Blackstone is shopping for a five-year mortgage on the 1,467-room Waldorf-Astoria. The fund shop evidently broke that hotel out by itself because of the expectation that it would command razor-thin pricing. Blackstone is considering proposals for $500 million to $550 million of debt. At the middle of that range, the loan-to-value ratio would be only about 30, one source said, putting the hotels value at some $1.75 billion, or $1.2 million/room. The finalists are balance-sheet lenders a number of banks, plus at least one insurance company. Blackstone, which is being advised by Eastdil Secured, is expected to make a decision soon. Blackstone acquired Hilton for $26.2 billion in 2007, at the top of the market. A lending syndicate led by Bear Stearns provided $20.6 billion of debt to finance the deal. Also holding pieces of the package were BofA, Deutsche,...

BofA Wins Floater on Swan, Dolphin Hotels

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Bank of America has landed a $385 million floating-rate loan on the leasehold interests in the Swan and Dolphin Hotels at the Disney World complex near Orlando. BofA closed the mortgage this week and is expected to securitize it via a stand-alone offering next month. The adjacent hotels, which encompass 2,267 rooms, are owned by a partnership between Tishman Hotels and MetLife, both of New York. The duo used most of the proceeds to retire a $330 million floater that Lehman Brothers wrote in 2006. That loan had a three-year term and four one-year extension options. Lehman securitized the senior $320 million portion via a $2.1 billion pooled offering (LBFRC 2006-LLF C5). The remaining $10 million was structured as a B-note. The Tishman partnership exercised its final extension option last year, according to a servicer report. That pushed the final maturity date to this week. The Tishman team built the 758-room Swan in 1989 and the 1,509-room Dolphin in 1990. The properties, in Lake Buena Vista, are on ground owned by Walt Disney Co. and are connected by a pedestrian causeway that crosses a man-made lake. The hotels, which are operated by Starwood Hotels amp; Resorts of Stamford, Conn., have more than a dozen restaurants, four swimming pools, a three-acre water complex and a lakeside beach. The properties draw tourists because of their proximity to three of Disney Worlds theme parks Epcot, Disneys Hollywood Studios and the Magic Kingdom. They also attract conventions. A shared complex has 329,000 square...

CMBS Spreads Tighten Slightly as Yields Fall

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Spreads on new commercial MBS issues narrowed only slightly this week, even as financial markets rallied in response to the Federal Reserves surprise announcement that it would keep its massive bond-buying program running full-tilt. A plunge in 10-year Treasury rates cut into absolute yields on CMBS, creating resistance to any sharp reduction in spreads. The week saw U.S. issuers market five CMBS offerings totaling $3.8 billion, including three multi-borrower transactions. The latest, a $1.1 billion offering by Ladder Capital, Deutsche Bank and Natixis, is expected to price today or Monday. Its long-term, super-senior bonds were being marketed yesterday with a projected spread of 103 bp over swaps. Equivalent benchmark bonds in a $1.1 billion offering led by Citigroup and Goldman Sachs went out the door at the same level on Wednesday, just before the Fed announcement. Comparable paper in a $1 billion deal led by Wells Fargo and RBS priced Monday at 105 bp (see Initial Pricings on Pages 14-17). That matched the previous conduit issue, which priced Aug. 14 (GSMS 2013-GCJ14). Investors generally cheered the Feds decision to postpone any tapering of its long-running effort to hold down interest rates by scooping up $85 billion per month of Treasury and mortgage-backed bonds. Ten-year Treasury yields plummeted to 2.76 by the close of business yesterday, down from 2.86 the day before the announcement and a two-year high of 2.98 on Sept. 5. Yet there was little movement in new-issue spreads. Thats partly...

CMBS Spreads Tighten Slightly as Yields Fall

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Spreads on new commercial MBS issues narrowed only slightly this week, even as financial markets rallied in response to the Federal Reserves surprise announcement that it would keep its massive bond-buying program running full-tilt. A plunge in 10-year Treasury rates cut into absolute yields on CMBS, creating resistance to any sharp reduction in spreads. The week saw U.S. issuers market five CMBS offerings totaling $3.8 billion, including three multi-borrower transactions. The latest, a $1.1 billion offering by Ladder Capital, Deutsche Bank and Natixis, is expected to price today or Monday. Its long-term, super-senior bonds were being marketed yesterday with a projected spread of 103 bp over swaps. Equivalent benchmark bonds in a $1.1 billion offering led by Citigroup and Goldman Sachs went out the door at the same level on Wednesday, just before the Fed announcement. Comparable paper in a $1 billion deal led by Wells Fargo and RBS priced Monday at 105 bp (see Initial Pricings on Pages 14-17). That matched the previous conduit issue, which priced Aug. 14 (GSMS 2013-GCJ14). Investors generally cheered the Feds decision to postpone any tapering of its long-running effort to hold down interest rates by scooping up $85 billion per month of Treasury and mortgage-backed bonds. Ten-year Treasury yields plummeted to 2.76 by the close of business yesterday, down from 2.86 the day before the announcement and a two-year high of 2.98 on Sept. 5. Yet there was little movement in new-issue spreads. Thats partly...

More Large-Loan Floaters Appear on Horizon

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After a slow return from the crash, issuance of commercial MBS offerings backed by pools of large, floating-rate loans are poised to pick up steam. An increase in borrower demand for floating-rate debt on stabilized properties and willingness by securitization lenders to write those loans are setting the stage for more multi-borrower floaters to hit the market in coming months. Those deals were a staple of the market before the crash, but only six have priced since 2008, in part because bond buyers were leery of the transitional properties that typically backed adjustable-rate loans. But securitization pros say that in recent months theyve seen more borrowers looking to put floating-rate debt on properties that are well-occupied and generate high cashflows. Such loans will likely be more palatable to bond buyers. As a result, several securitization lenders have recently added floating-rate mortgages to their menus among them Bank of America, Cantor Fitzgerald, Citigroup, RBS and UBS. They join Deutsche Bank and J.P. Morgan, which have been the only issuers to sell multi-borrower floaters since the downturn. Everybody on the Street is looking at this business, said one longtime lender. Recent increases in fixed interest rates contribute to the shift. Floating-rate loans have become more attractive [to borrowers], said one CMBS group head. Add to that the large institutions that now have the resources to do these loans and the investor base, which is getting more comfortable w...

JP Morgan Nabs 2 Hotel Loans, Plans CMBS

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J.P. Morgan has scored two hotel-loan assignments totaling nearly $1.2 billion that will likely result in separate standalone securitizations. The bank has agreed to provide $845 million of floating-rate debt on the landmark Fontainebleau Hotel in Miami Beach, Fla. The borrower, Turnberry Associates, plans to use the proceeds to buy out its partner, the sovereign wealth fund of Dubai, and to retire existing debt. J.P. Morgan also agreed to write a $350 million floater that will allow Atrium Hotels to refinance the Marriott Waikiki in Honolulu. That loan would have a three-year term with two one-year extension options. The Fontainebleau loan would also run for up to five years. Eastdil Secured lined up both mortgages. The commercial MBS deals resulting from the loans are expected to surface before Thanksgiving. A portion of the Fontainebleau loan will be structured as at least two slugs of mezzanine debt and sold separately. The buzz is that the most junior slice is being shopped with an interest rate of 9. Turnberry, of Aventura, Fla., and its partner, Istithmar, tapped UBS for a $580 million fixed-rate loan on the Fontainebleau last year. The 1,504-room property was appraised then at $1.1 billion. Since then, the value has gone up to around $1.4 billion, lenders said. That pegs the loan-to-value ratio on J.P. Morgans loan commitment at less than 60. The interest-only UBS loan has a five-year term, and becomes eligible for prepayment without penalty in May 2014. Since Turnberry intends to retire the...

Fannie Marketing a Big Batch of Performers

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Fannie Mae is shopping $600 million of performing mortgages on multi-family properties in 23 states, with a heavy concentration in California. The portfolio, which contains 447 loans with an average balance of $1.3 million, is expected to command par value or close to it. The vast majority of the aggregate balance 92.5 carries floating rates, and the rest has fixed coupons. On a weighted average basis, the portfolio has a 4.8 coupon, 8.4 years of seasoning and a 6.2-year remaining term. The loans arent guaranteed by Fannie. The agency is shopping the mortgages via Auction.com, which has divided them into seven geographic pools. Investors can bid on individual pools, combinations of pools or the entire portfolio. Initial bids are due Nov. 1, and final offers will be collected Dec. 5. Overall, the loans are secured by 465 properties with 18,456 total units. The largest pool, representing 61 of the portfolio, contains 300 loans, totaling $365 million, on California properties. The second-largest pool has 43 loans, adding up to $95 million, on properties in Texas and Oklahoma. There is also a $42.8 million pool with 31 loans on properties in Colorado, Nevada and Utah. Other pools consist of 36 mortgages on Northeast properties ($39.6 million); 15 loans apiece on assets in the Northwest ($22.8 million) and Midwest ($18.6 million); and seven loans on Southwest properties ($16.4 million). The offering comes as Fannie and Freddie Mac are under a government mandate to reduce their mortgage holdings....

4 CMBS Shops Share $1.2 Billion Mall Loan

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A Turnberry Associates partnership has tapped four lenders J.P. Morgan, Deutsche Bank, Morgan Stanley and Wells Fargo to originate a $1.2 billion fixed-rate loan on Aventura Mall in suburban Miami. Each lender will fund an equal portion of the seven-year mortgage, which will be securitized via a stand-alone offering by yearend. Turnberry and its partner, Simon Property, initially narrowed the field of bidders to five lenders, including Goldman Sachs. The duo, which is being advised by Eastdil Secured, then decided to divide the giant assignment among the four winners. J.P. Morgan is leading the lending syndicate. Earlier this month, Turnberry tapped J.P. Morgan to provide an $845 million floating-rate loan on the landmark Fontainebleau Hotel in Miami Beach. Turnberry plans to use some of the proceeds to buy out its partner, the sovereign wealth fund of Dubai. J.P. Morgan is expected to securitize that loan in a stand-alone securitization next month. Eastdil is also advising Turnberry on the Fontainebleau loan. For Aventura Mall, Turnberry and Simon initially solicited proposals for a $1.4 billion loan with a 10-year term, but evidently found the terms on a smaller loan with a shorter length more attractive. None of the loan will be structured as subordinate debt. Insurers also pursued the assignment, but the size of the loan was an obstacle. Three to five insurers would have had to team up to swallow it, and insurance syndicates are harder to piece together than securitization groups....

AXA Moves CMBS Portfolio From Brookfield

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AXA Equitable is shifting the management of its $900 million commercial MBS portfolio from Brookfield Investment to AllianceBernstein, an AXA affiliate. Starting Nov. 1, those holdings will be managed by Brian Phillips, AllianceBernsteins director of commercial real estate credit research. The portfolio consists of CMBS purchased at issuance from 2003 through 2008 with a heavy concentration in the last three years before the crash. The bonds, owned by AXA and its MONY Life affiliate, were issued with initial ratings ranging from double-A to triple-B-minus, but most are now below investment grade. In some cases, as lower-rated bonds have been wiped out by losses from loan defaults or modifications, AXAs notes have become the controlling classes of transactions, giving it the power to replace the special servicers. The portfolio had a market value of $900 million at yearend 2012, according to an SEC filing. New York-based AXA was among just a handful of institutional investors, including Hartford Investment and AIG, that targeted such purchases in the years leading up to the crash. More often than not, those so-called mezzanine CMBS bonds were snapped up by issuers of commercial real estate CDOs. Theres no word from AXA on the reason for the switch to AllianceBernstein. Brookfield managing director Jeffrey Williams, who runs that firms CMBS team, said the move reflects a trend among insurers and other investors to shift toward in-house managers. He noted that AXA has also recently internalized...

Unease Over Terror Insurance Rattles Market

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The commercial mortgage market is getting early warning signs of the possible consequences if the federal backstop for terrorism insurance is allowed to expire at the end of next year. Zurich North America told insurance brokers and consultants this week that starting in January, policyholders will be notified that their terrorism coverage could be altered, or premiums increased, if the government program lapses. A recent memo from Liberty Mutual was more direct, saying if the program isnt renewed, it will end coverage for certain terrorist acts. A wave of similar warnings is expected in the coming months, as the industry waits to see if Congress acts before the Terrorism Risk Insurance Act (TRIA) expires on Dec. 31, 2014. For lenders, the uncertainty raises the prospect that borrowers will be unable to maintain current levels of coverage on collateral properties. While most observers think the program will be reauthorized, it does face resistance from some House members who argue that it was intended to be a temporary response to the 9/11 attacks, not a permanent fixture. In any event, action isnt expected until late next year. Since most property insurance policies have one-year terms, many and perhaps most existing policies will come up for renewal before the fate of the program is known. The backstop is designed to kick in if terrorism causes $100 million or more in aggregate losses within a single year. Once an insurance company made payouts amounting to 20 of its earned premiums from terrorism...

MetLife to Lead $1 Billion Loan on NY Offices

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Blackstone has tapped MetLife to lead a $1 billion floating-rate mortgage on a Midtown Manhattan office condominium. MetLife has agreed to originate $500 million of debt. Two to three other lenders are expected to also participate. Among those in the running are HSBC, Morgan Stanley, New York Life and Wells Fargo. The 1.1 million square feet of collateral makes up most of the 42-story building at 1095 Avenue of the Americas. Eastdil Secured is arranging the debt package for Blackstone. The mortgage would have a term of up to five years, if the borrower exercises all extension options. Its expected to be priced around 165-170 bp over one-month Libor and have a loan-to-value ratio of 53, valuing the collateral at nearly $1.9 billion. MetLife is a major tenant in the condo. The building, at the southwest corner of West 42nd Street, is the former headquarters of Verizon Communications, which still owns the other 20 of the space and uses it for telecommunications services. Verizon sold the condominium consisting of 32 floors of offices and ground-floor retail space for $505 million to Equity Office Properties of Chicago in 2005. Blackstone acquired it two years later via its $39 billion takeover of Equity Office. Blackstone financed a portion of the Equity Office portfolio, including the tower, with a $6.9 billion floating-rate loan that was securitized in a single-borrower deal (GSMS 2007-EOP). The mortgage had a two-year term and three one-year extension options. Loan modifications pushed out the final...

3 Banks Share $760 Million Mall Loan

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Barclays, J.P. Morgan and RBS have agreed to write a $760 million loan on five malls in the Midwest and West. The banks will split the loan evenly and securitize it in a single-borrower transaction this month. The short-term, floating-rate mortgage will be cross-collateralized by the properties, which are in secondary markets in Ohio, California and Washington. The malls total 5.7 million square feet. Eastdil Secured arranged the loan. The borrower, Starwood Capital of Greenwich, Conn., agreed several weeks ago to buy a 90 stake in the five malls, plus two others, from Westfield in a deal valued at $1.6 billion. The largest property backing the loan is the 1.3 million-sf Parkway Plaza Mall in El Cajon, Calif. It is anchored by Macys, JC Penney and Sears and includes big-box stores Walmart and Dicks Sporting Goods. Inline tenants include an 18-screen IMAX Regal Cinemas. The other properties are: Franklin Park Mall in Toledo, Ohio (1.3 million sf). Great Northern Mall in North Olmstead, Ohio (1.2 million sf). West Covina Mall in West Covina, Calif. (1.2 million sf). Capital Mall in Olympia, Wash. (780,000 sf). Great Northern Mall has a securitized mortgage slated to mature next month. Prudential originated a $43 million loan on the property in 2004 and securitized it in a $1.1 billion transaction (BSCMS 2004-PWR3). The loan has paid down to $35.7 million. The malls occupancy rate was 73 as of June, according to a servicer report.

MetLife Writes Big Floater on KPMG Tower

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MetLife has originated a $290 million floating-rate loan for a Brookfield Office Properties partnership on KPMG Tower in Los Angeles. The five-year mortgage, which closed two weeks ago, came on the heels of the Brookfield partnerships $2.1 billion takeover of MPG Office, which previously owned the 1.1 million-square-foot skyscraper. The Brookfield team used the proceeds to help retire about $335 million of existing debt. That mortgage, provided in 2007 by a Eurohypo syndicate, had an original face amount of $400 million. The loan was scheduled to mature in October 2012, but MPG negotiated a one-year extension in return for agreeing to pay down the principal by $35 million. Over the summer, when the takeover of MPG by New York-based Brookfield and its institutional partners was taking longer than expected to close, the dozen syndicate members discussed another extension. One market pro said the talks were contentious because many syndicate members were German institutions that had cut back or completely halted lending in the U.S., making them reluctant to extend their investments. But last month, the group approved an extension to early 2014. In September, while the talks were ongoing, one syndicate member, Dusseldorfer Hypothekenbank, decided it didnt want to wait. The bank put its $34.9 million piece of the syndicated debt up for sale via DebtX. H/2 Capital, a high-yield shop in Stamford, Conn., scooped up the debt, which was paid off a few weeks later when the Brookfield team retired the syndicated loan. KPMG...

Trade Group’s Confab Drawing Large Crowd

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Attendance at the CRE Finance Councils 15th January conference could come close to its boom-time record, judging by the rapid pace of registrations. The sign-up tally for the trade groups Miami Beach gathering stood at 1,216 on Wednesday, up from 997 at the same point a year ago. The turnout should easily surpass the post-crash high of 1,320 industry pros that showed up for last Januarys conference, said Stephen Renna, the councils chief executive. At this rate, participants could exceed 1,500, he said. The heavy pace of registrations reflects the recovery in the CRE finance sector and the breadth of industry issues that will be covered at the conference. The annual gathering offers lenders, borrowers, investors and service providers a chance to network and compare viewpoints on the markets ongoing expansion. Coming off the busiest year since the crash, industry pros are generally optimistic about the prospects for continued growth in commercial MBS issuance and portfolio lending next year. Its an interesting time, and were at a pretty important inflection point in the business, said one executive at a major servicing shop. Market participants want to talk about where it will go from here. For example, multi-family lending will be a hot topic, as players in the sector await word on whether Fannie Mae and Freddie Mac will be forced to further curtail their dominant roles in the sector. The Federal Housing Finance Agency, which ordered 10 cuts in Fannie and Freddie originations this year,...

Helaba, Deka, Sovereign Refi Boston Tower

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Three banks have teamed up to provide a $200 million mortgage to Brookfield Office Properties on a high-quality Boston office building that its working to lease up. Helaba Bank led the financing and brought in Deka Bank and Sovereign Bank. The five-year loan was funded last month, with proceeds going to retire existing debt. The collateral is a 796,000-square-foot building at 75 State Street, on the northern edge of Bostons Financial District. Its occupancy rate was just 63.5 at yearend, following the departure of a major tenant, but has since risen to 74.4, according to CoStar. Back in 2001, Brookfield sold a 49 stake in the 31-story tower and a 1.1 million-sf building nearby, at 53 State Street. In early 2008, Brookfield reacquired the minority interest in both buildings for $477 million. Later that year, the New York REIT obtained a $300 million mortgage on 75 State from Deutsche Bank. The financing package included a $50 million mezzanine loan. Deutsche sold portions of the senior debt to other banks. In 2011, Brookfield bought back the mezzanine debt from an undisclosed holder at a discount and exercised its extension options on the senior loan. At the time, it was facing the departure of anchor tenant Wellington Management. The Boston investment advisor moved out upon expiration of its lease on 360,000 sf, or about 45 of the building. The senior loan was scheduled to reach final maturity this June. Its unclear what arrangements Brookfield made with the Deutsche-led lending group while it li...
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