The Belnord Sold for $575M

HFZ Capital Group, led by developer Ziel Feldman, has purchased the Belnord building at 225 West 86th Street in New York for $575 million. The landmark building was sold by Extell Development; according to a report from The Real Deal, Extell's Gary Barnett, together with a group of investors that also included Property Market Group's Kevin Maloney, paid $15 million for the property in 1994. Law firm Paul Hastings represented the buyer — HFZ affiliate Belnord Partners LLC — in connection with its acquisition of the property.

The 13-story building, located at 225 West 86th Street and built in 1909, includes 218 rental units, according to a Wall Street Journal report. The price is more than $1,000 per square foot, or $2.64 million per apartment, according to the newspaper. The property has the largest interior courtyard of any property in Manhattan, according to Extell Development, and takes up an entire block, bordered by Broadway and Amsterdam Avenue and 86th and 87th Streets. Nearby, HFZ is developing two condominium conversions on the Upper West Side.

For more news and information visit Blumberg Capital Partners.

US Impacts European CMBS Rebound

A new article from the Wall Street Journal titled CMBS Make a Comeback in Europe examines how the commercial mortgage-backed securities market recovery in the United States is having an impact on the European market as some of the biggest US originators are ramping up European deals. While deal volume is still below pre-crisis levels, there have been seven new European CMBS issues this year worth €2.57 billion ($3.2 billion), according to data firm Trepp LLC, compared with €47.3 billion in the peak year of 2006. An excerpt follows:

In Europe, after a limited number of deals in 2012, the CMBS market slowly restarted in 2013, but was dominated by refinancing of multifamily portfolios. Last year, about €7.2 billion of CMBS was issued, but almost all of that was from the refinancing of three large German residential portfolios, according to Trepp.

"The predominance of German multifamily in new securitization at the beginning of 2013 was significant," said Patrizia Pirinoli, CMBS analyst at Goldstar Research Ltd. Most issues, she added "stemmed also from previous securitizations."

The recovery of Europe's CMBS market is partly due to work by a trade organization, the Commercial Real Estate Finance Council, which issued new guidelines for the securities in Europe, so-called CMBS 2.0. The guidelines are meant to guarantee to investors "more transparency, more access to the underlying documents," said Charles Roberts, a partner at Paul Hastings.

Many of the deals this year have been more complex than simple refinancing. Some have provided debt to borrowers to finance new acquisitions and others involved multiple loans. For example, Goldman Sachs completed two CMBS originations backed by loans on Italian portfolios owned respectively by Blackstone Group and Morgan Stanley.

Deutsche Bank has been a leading player in Europe this year. For example, in October, together with Crédit Agricole CIB, it sold a £750 million ($1.18 billion) CMBS issue to refinance the Westfield Stratford City shopping center in London. This year, Deutsche Bank also underwrote the first postcrisis multiborrower CMBS in Europe backed by two loans on retail and office buildings across the Netherlands.

Markus Kreuter, director for CRE origination at Deutsche Bank, confirmed that Deutsche Bank expects more deals and added France, Benelux and Spain among the markets that might see more CMBS activity next year. Italy is another market where, in the lights of Italian banks' negative results to the European Central Bank's stress tests, CMBS "is a product that can bring liquidity," said Mr. Kreuter.

For more news and information visit Blumberg Capital Partners.

Kimco Sells InTown Suites Portfolio for $735M

Kimco Realty Corp., the largest U.S. owner of community shopping centers, announced this week that it had closed on the sale of the InTown Suites company and real estate assets for $735 million, including $609 million of existing mortgage debt. An affiliate of Connecticut private equity firm Starwood Capital Group bought 100% of the common stock of InTown Hospitality Corp. with representation from a team of Paul Hastings attorneys led by Rick Kirkbride, Tom Kruger, and David Viklund. The portfolio includes 138 extended stay properties with approximately 18,000 rooms across 21 states. Citigroup served as the financial adviser to InTown Hospitality Investors on the sale.

Rick Kirkbride said the trend is that, during a very busy first half of the year, people are cautiously predicting a busy second half. "So much of that will depend upon the volatility in the interest rate environment as many more increases will cause buyers to have to reprice their acquisitions and sellers may or may not have adjusted their own expectations of what the market should bear," Kirkbride said. "If sellers do so, then activity should continue somewhat unabated or there may be a significant slowdown in activity."

For more news and information visit Blumberg Capital Partners.