AREA replaced all representatives from Africa Israel on the board of the condominium, according to an amended condo offering plan filed this month with the office of New York State Attorney General Eric Schneiderman. AREA executives including North America Chief Executive Officer Richard Mack and global CEO Lee Neibart will join the board.
As a condition of the recapitalization, AREA assumed control of Apthorp Associates LLC, the entity that owns the project, New York-based AREA said yesterday in a statement. AREA will now be responsible for overseeing the sale of 110 unsold condo units at the former rental building, according to the offering plan. Sales for the 163 units at the Apthorp began in 2008, according to property-listings website StreetEasy.com.
“AREA put more money in the deal and now they carry more risk in the project,” Tamir Kazaz, CEO of Africa Israel USA, said in a telephone interview. “Therefore, they wanted more control rights.”
AREA was a mezzanine lender to the project before the recapitalization, according to the statement.
Africa Israel was part of a joint venture that purchased the Upper West Side apartment building in 2007 for about $391 million, according to commercial-property research firm Real Capital Analytics Inc. The property, built by the Astor family in the early 20th century, occupies a full city block on Broadway between 78th and 79th streets.
Africa Israel retains a 50 percent equity stake in Apthorp Associates, Kazaz said. That means they will recover funds only after all creditors have been paid, he said.
“We and AREA share the same interest here -- to maximize the return,” Kazaz said. “We trust that AREA will work hard to achieve it.”
The senior loan on the property was retired as part of the recapitalization, AREA said in the statement. It was replaced by a $125 million first mortgage from Macquarie Group Ltd. (MQG) and a senior mezzanine loan of $60 million, according to the condo offering plan.
AREA Real Estate Finance Corp., a debt fund of AREA Property, holds a majority stake in the new senior mezzanine loan, the company said.
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