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Workouts: Non-Performing Loan Sales & REO - page 7 / 54

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Relevant Experience: Financial Institution Advisory

Citibank N.A. The Bertelsmann Building, 1540 Broadway, New York, NY

An extraordinarily complex deal, 1540 Broadway, a 44-story office building, involved a consortium of 18 lenders. The lead lender was Citibank; the balance, Japanese lenders – their initial investment had been a $253 million mortgage. The property had been originally developed by Eichner Properties/VMS Realty and was sitting vacant, with another $60 to $100 million required for completion. Carrying costs were mounting and the market was declining.

A 1.1-million-square-foot building, the property was divided into condominium units: 850,000 square feet of office (unfinished); 100,000 square feet of retail (net leased to Hahn); a two-level condo restaurant (Riese Brothers) that included signage; a Sony Theater lease; a garage lease; an air rights lease; and a renovation due for the Lyceum Theater. All components had to be valued and 18 banks had to be satisfied. The only viable transaction appeared to be a sale to a user who could pay for their own build-out.

We

were brought in by Citibank to act as chief negotiator in the

foreclosure with Interfacing with a

Bruce Eichner-VMS and a Japanese partner. credit-worthy purchaser, Bertelsmann, a privately-

owned

157-year-old

German

music

and

publishing

interest,

the

17

Japanese banks Frank negotiated

and the City of New York’s EDC, Newmark Knight a purchase agreement that called for a pre-packaged

bankruptcy where the 11. The final deal was

Eichner-led partnership was also tied to the buyout of the

to go into Chapter retail lease as well

as

an

additional

$10

million

in

costs

the

buyer

absorbed

as

part

of

the

overall deal to compensate for the air rights in which the were built. The city provided a $10 million tax incentive.

top

15

floors

United States Bankruptcy Court, Southern District Of New York Crossroads Tower, 80-02 Kew Gardens Road, Queens, NY

In mid-1993, Newmark Knight Frank Capital Group was appointed receiver and trustee for 80-02 Kew Gardens Road, also known as Crossroads Tower, a 400,000-square-foot office tower in Kew Gardens which was the largest office building in Queens.

A foreclosure had been commenced by the Canadian Imperial Bank of Commerce (CIBC) and a consortium of lenders. When the fee owner filed bankruptcy, Newmark Knight Frank Capital Group was brought in to handle interim management and leasing of the property, which was 60% vacant at that time.

Shortly thereafter, Newmark Knight Frank’s leasing team launched an aggressive marketing campaign, swiftly leasing up the building to full occupancy, allowing the owners to restructure the property and come out of bankruptcy.

5

Capital Group

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