Starwood Property Trust And Starwood Capital Group Co-Originate $475 Million
- Financing to allow the acquisition and redevelopment of prominent Times
Square property -
GREENWICH, Conn., Oct. 16, 2012
GREENWICH, Conn., Oct. 16, 2012 /PRNewswire/ --Starwood Property Trust (NYSE:
STWD) and Starwood Capital Group (on behalf of Starwood Distressed Opportunity
Fund IX) today announced the co-origination of a $475 million first mortgage
loan and mezzanine loan for the acquisition and redevelopment of a 10-story
retail building located at 701 Seventh Avenue in Midtown Manhattan. The
building is situated on the northeast corner of the famed Times Square bow
tie, one of the world's busiest shopping stretches with an estimated 500,000
visitors per day. The loan will have an initial funding of $375 million with
$100 million of future funding for redevelopment costs and also contains an
equity participation right for the lender. The primary sponsor is The Witkoff
Group, a fully integrated real estate investment firm.
"This transaction is a prime example of our unique ability to provide and
structure large, highly specialized loans on an expedited timetable that meets
the needs of the borrowers while also completing our disciplined underwriting
requirements" said Barry Sternlicht, Chief Executive Officer of Starwood
Property Trust. "Our experienced team of professionals positioned us to
provide a financing solution for The Witkoff Group and its equity partners
while enabling Starwood Property Trust to meet or exceed our return targets."
The Witkoff Group, together with New Valley LLC, a subsidiary of Vector Group
Ltd. (NYSE:VGR) and a subsidiary of Winthrop Realty Trust (NYSE:FUR),
acquired the property from a non-institutional owner who successfully
reassembled the site through a series of complex and lengthy negotiations with
the property's existing tenants. Witkoff will implement a comprehensive
redevelopment plan over the next 30 months which includes the demolition of
the building's interior and its conversion into a new retail space with the
bottom three quarters of the property dedicated to retail and the top one
quarter dedicated to a food and beverage establishment.
"Our team worked side by side with The Witkoff Group and its partners to
provide a flexible financing solution that enabled them to quickly move
forward with the transaction," said Marcos Alvarado, Senior Vice President at
Starwood Capital Group. "Times Square is an iconic destination and we are
excited to facilitate a transaction that will allow the redevelopment of a
marquee property in the area."
With 145,000 square feet of additional air rights, the redevelopment includes
plans for ideal showroom retail space that may be occupied by one or more
retailers and a platform to be built on top of the retail component capable of
supporting a 31 story hotel tower and a new 120 foot tall, 22,000 square foot
LED sign, which will be two times the size of all comparable new signs in the
area and will provide substantial income to the property.
Manhattan's Times Square submarket is recognized as one of the most popular
tourist destinations in the world and is home to some of the largest and most
well-known global brands. A report issued by Cushman & Wakefield in late 2011
highlighted the Times Square bow tie region, running from West 42nd up to West
47th streets between Broadway and Seventh Avenue, as having the second highest
asking rents in Manhattan, with an average asking rent of $2,100 per square
About Starwood Property Trust, Inc.
Starwood Property Trust, Inc. is focused on originating, investing in,
financing and managing commercial mortgage loans and other commercial real
estate debt investments, commercial mortgage-backed securities ("CMBS"), and
other commercial real estate-related debt investments. Starwood Property
Trust, Inc. also invests in residential mortgage-backed securities ("RMBS")
and residential real estate owned, and may invest in non-performing loans,
commercial properties subject to net leases and residential mortgage loans.
The Company is externally managed and advised by SPT Management, LLC, an
affiliate of Starwood Capital Group, and has elected to be taxed as a real
estate investment trust for U.S. federal income tax purposes.
About Starwood Capital Group
Starwood Capital Group is a private, U.S.-based investment firm with a core
focus on global real estate. Since the group's inception in 1991, the firm
has raised nearly $16 billion of equity capital and, through its various
funds, has invested $13 billion representing nearly $35 billion in assets.
Starwood Capital Group currently has over $21 billion of assets under
management. Starwood Capital Group maintains offices in Greenwich, Atlanta,
San Francisco, Washington, D.C., Los Angeles and Chicago, and affiliated
offices in London, Luxembourg, Paris, Mumbai and Sao Paulo. Starwood Capital
Group has invested in nearly every class of real estate on a global basis,
including office, retail, residential, senior housing, golf, hotels, resorts
and industrial assets. Starwood Capital Group and its affiliates have
successfully executed an investment strategy that includes building
enterprises around core real estate portfolios in both the private and public
markets. Additional information about Starwood Capital can be found at
About the The Witkoff Group
The Witkoff Group is a fully integrated real estate investment firm that owns
a diverse portfolio of real estate in select U. S. markets. The company
specializes in identifying and acquiring undervalued properties in key central
business district locations as well as assets with strong repositioning
potential in newly emerging markets. These strategies have guided the
company's acquisition and management activities.
Jason Chudoba, ICR on behalf of Starwood Property Trust
SOURCE Starwood Property Trust, Inc.
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