Mortgage Observer September 2012

The Insiders Monthly Guide to New Yorks Commercial Mortgage Industry September 2012
Q&A
The M.O. talks motivation
with HKS Capital Partners
Jerry Swartz
CMBS:
Where Were
Headed
POWER PROFILE
STEVE
KENNY
BANK OF AMERICA
RACES AHEAD
Newport Tower
Prudential Mortgage
Capitals $200 Million
Renance

325 Hudson Street
Acquisition
Loan in Place for
Jamestown

Massey
Knakal Capital
Follows Client to
Sunshine State
Blackstone
$575 Million
Loan for Industrial
Portfolio Buy
TMO.0912.CS3.COVER.indd 1 8/30/12 3:18:45 PM
Relationship Driven.
Execution Focused.
Only Meridian Capital Groups powerful
nancing relationships can consistently
achieve the unparalleled results our
clients require.
Meridian Capital Group, LLC
proudly advised on fnancing for the
following transaction:
B&L Management
25-Building Multifamily Portfolio
New York, NY
$160,000,000
This transaction was negotiated by:
Moshe Majeski, Managing Director
Abe Hirsch, Managing Director
1 Battery Park Plaza New York, NY 10004 | 212 972 3600 | www.meridiancapital.com
Commercial Mortgage Observer - Sept. 2012 Final.indd 1 8/30/12 1:14 PM
Untitled-41 1 8/30/12 1:33:44 PM
321 West 44th Street, New York, NY 10036
212.755.2400
Carl Gaines
Editor
Jotham Sederstrom
Editorial Director
Daniel Geiger
Daniel Edward Rosen
Staf Writers
Sam Chandan
Joshua Stein
Columnists
Michael Stoler
Contributor
Noam S. Cohen
Copy Editor
Barbara Ginsburg Shapiro
Associate Publisher
Robyn Weiss
Director of Real Estate
Ed Johnson
Production and Creative Director
Peter Lettre
Photo Editor
Lauren Draper
Designer
Lisa Medchill
Advertising Production
OBSERVER MEDIA GROUP
Jared Kushner
Publisher
Elizabeth Spiers
Editorial Director
Christopher Barnes
President
Barry Lewis
Executive Vice President
Jamie Forrest
Associate Publisher, Senior Vice President
Michael Woodsmall
Editorial Manager
Zarah Burstein
Marketing Manager
Mark Pasquerella
Controller
Tracy Roberts
Accounts Payable Manager
Accounts Receivable
Ian McCormick
September 2012 / Contents
Editors Leter 02
News Exchange 04-10
Mortgage originations, note sales,
investments, industry research
Prudential Refnances Newport Tower for $200 M.
Thor Equities 590 Fifth Gets $100 Million
Funding for Nazarian Hotel Revealed
Steiner Equities Takes $25 M. Loan for Multifamily
M&T Bank Set to Acquire Hudson City Bancorp
for $3.7 Billion
In-Depth Look 11
Competition Hot in Multifamily
by Michael Stoler
Q&A 12
Jerry Swartz of HKS Capital Partners
by Carl Gaines
Scheme of Things 14
Monthly charts of commercial real estate
fnancings in the boroughs
Steins Law 16
How New York State Shoots Itself in the
Foot on Revolving Mortgage Loans
by Joshua Stein
The Basis Point 17
Lenders Press Forward, but Outlook
for CMBS Remains Reserved
by Sam Chandan
Workforce 18
Hirings, promotions, defections and appointments
Power Profle 20-23
Bank of America: Of to the Races
by Carl Gaines
CMBS 24-27
Keep Calm and Carry On
by Carl Gaines
Culture 28
What made your summer reading lists and work wear
The Sked: September 30
Our picks for the months must-attend events
Of Interest 32
An index of all the people, places, addresses and
companies mentioned in this issue
Cover Photo by Beowulf Sheehan
20
24 04
06
1
TMO.0912.ContentsCS3.indd 1 8/30/12 3:41:09 PM
2
Editors Letter /September 2012
For our September issue, I was lucky
enough to profle Steve Kenny, Bank of
Americas banking executive for New York
and New Jersey. In addition to the obvious
deals like Extell Developments One57 and
Edward Minskofs 51 Astor PlaceI was
able to confrm another important piece of
information: running would not be for me.
See, Steves currently training to run in the
ING New York City Marathon November 4,
the early morning training for which he fts
in to a work schedule that includes eforts to
diversify the banks commercial real estate
portfolio.
I also spoke to industry experts about the
CMBS market, in relation to the massive
amount of loans coming due the rest of the
year. I was curious to learn, with the CMBS
market not nearly where it was before the
fnancial crisis, if there was any concern
about being able to refnance whats coming
due. The general consensus was, well, that its
a complicated issue. Experts like Prudential
Mortgage Capital Companys Melissa Farrell,
who Im happy to say well soon profle, said
that the disposition of these loans depends
on many factors. They explain why in the
piece I wrote.
Even more ambitious, though, than any
piece on the CMBS market and where it
might head was working on our new Culture
page. Were really trying to get more of a
sense of who our readers arethe folks who
work in commercial real estate fnanceand
what it is that drives you. As summer draws
to a close, a look at what made your summer
reading lists proved really insightful.
Carl Gaines, Editor
Running on
All Cylinders
TMO.0912.EditorsLetterCS3.indd 2 8/30/12 3:03:22 PM
Credit is subject to approval. Rates and programs are subject to change; certain restrictions apply.
Products and services provided by JPMorgan Chase Bank, N.A. #1 claim based on 2011 FDIC data.
2012 JPMorgan Chase & Co. Member FDIC. All rights reserved.
How did Chase become the nations leader in multifamily lending? With great rates, low fees and a deep
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Untitled-5 1 8/28/12 11:32:34 AM
4
OriginatiOns
news Exchange /September 2012
Prudential refnances newport
tower for $200 Million
$575 Million Loan to
Blackstone for Industrial
GE Capital Real Estate has provided a $575
million loan to afliates of a Blackstone real es-
tate fund for its purchase of 66 U.S. industrial
properties. The properties are located across 10
states in the South, mid-Atlantic and Midwest
and were bought from Australias Dexus Prop-
erty Group.
Frank Cohen, a senior managing director at
Blackstone, said that several factors put GE ahead
in the race to fund the acquisition.
There was signifcant interest in fnancing
this transaction, but GEs creative balance sheet
approach and fexible deal structure was a per-
fect match for our business plan, Mr. Cohen said.
Theyve been a responsive, experienced lender
who can deliver on transactions like this.
To his point, GECRE underwrote and closed
the loan in under 45 days, according to an an-
nouncement it released about the transaction,
which allowed Blackstone Real Estate Part-
ners VII to pick up 129 buildings and a total of
16.4 million square feet.
A spokeswoman for GECRE told The Mortgage
Observer that executives were traveling and un-
available for comment. However, in a prepared
statement, Alec Burger, president of the North
America division, said that it had a previous
working relationship with Blackstone. Our team
focused their expertise and eforts on this port-
folio and delivered a structure that met Black-
stones needs, Mr. Burger added.
Blackstone has said that it will sell its U.S. ofce
holdings, valued at $22 billion. Concurrently, as
The Mortgage Observer previously reported, the
frm leased 31,000 square feet of spacethe en-
tire 48th foorat Citadel Groups 601 Lexing-
ton Avenue.
CWCapital Arranges $46
Million Principal Loan
CWCapitals life company platform has ar-
ranged a $46 million loan for a mixed-use build-
ing on Manhattans Upper West Side. The loan
was provided by Principal Real Estate Inves-
tors, which said through a spokesman that it has
been targeting such attractive opportunities,
investing in multifamily throughout the New
York City boroughs.
Todd Trehubenko, a CWCapital managing
director, arranged the fnancing. The compa-
ny declined to comment beyond a release about
the deal, citing requested anonymity on the part
of the borrower. However, Mr. Trehubenko said
P
h
o
t
o
C
o
u
r
t
e
s
y
H
F
F
Newport Tower, a 1.1 million-square-foot of-
fce tower in Jersey City, N.J., has been refnanced,
thanks to a $200 million frst mortgage provided
by Prudential Mortgage Capital Co. The loan is
for seven-years, at a 3.5 percent fxed rate.
Owner Bentall Kennedy bought the building at
525 Washington Boulevard in October 2011 from
Brookfeld Ofce Properties for $377.5 million.
Marty Standiford, a vice president of acqui-
sitions at Toronto-based Bentall Kennedy who
worked on the original acquisition, told The Mort-
gage Observer that the building was the companys
entry to the New York City-area market and that
the Jersey City location was attractive on several
fronts.
The basic reasoning was that we wanted expo-
sure to metropolitan New York ofce, and we saw
this as an opportunity to do that in a way that, in
our view, gave us a tremendous rent role of blue-
chip tenants in the building with long-term dura-
tion leases, Mr. Standiford said. The Newport,
Exchange Place submarket has great supply and
demand fundamentals.
Tenants include BNP Paribas and AXA Equi-
table. Competition, he add-
ed, is limited in the area, due
to market rents that make
new construction difcult to
justify.
Mr. Standiford estimated
that the buildings current oc-
cupancy rate, taking into ac-
count pending leases, is about
93 percent.
HFF arranged the loan for
the borrower, led by manag-
ing director Cary Abod and
senior managing directors
Whit Wilcox, Mike Tepedi-
no and Tom Didio. The team
worked on behalf of a sub-
sidiary of Multi-Employer
Property Trust called MEPT
Newport Tower LLC. Bentall
Kennedy in turn advised the
subsidiary.
In June it was announced
that the California Pub-
lic Employees Retirement
System had bought a one-
third stake in Bentall Kenne-
dy, investing $100 million in
the real estate adviser. CalP-
ERS said in a statement at the
time that it was a move de-
signed to engage the pension
fund and its staf with an expe-
rienced real estate investment
and management team.
TMO.0912.NewsExchangeCS3_CG.indd 4 8/30/12 12:29:46 PM
5
September 2012 / News Exchange
CWCapital was very pleased to be able to com-
plete this transaction for the borrower. He added
that it is a top-quality asset in a terrifc location,
with dedicated, long-term ownership.
We reviewed numerous options for the client
and ultimately determined a life company execu-
tion best met their goals for long-term, low-le-
verage fnancing, Mr. Trehubenko continued.
The refnancing generated a great deal of inter-
est from our fnancing partners, which resulted
in very attractive terms for our client.
CWCapital, which Bethesda, Md.-based Walk-
er & Dunlop announced plans to acquire in June,
worked with CW Financial Services afliate
Rockwood Real Estate Advisors on the deal.
Andre Dobrowsky represented Rockwood.
Michael Berman, president and CEO of CW-
Capital, weighed in on the deal in a prepared
statement as well, pointing out that it boded well
for the frms new life insurance platform.
Since launching our life company platform
last year, we have established a strong network
of relationships, including the very capable team
at Principal, he said, which has allowed us to
assure our borrowers have access to the most
competitive and fexible fnancing options.
Meanwhile, a Principal Real Estate Investors
spokesman said in an email to The Mortgage Ob-
server that it was attracted by the conservative
nature of the loan request and that the bor-
rower liked our terms and aggressive pricing.
He hinted that there would likely be more invest-
ments to come.
In the last three years, Principal Real Estate
Investors has seen attractive opportunities and
made a signifcant number of new investments
in fnancing apartment properties in Manhattan,
Brooklyn, Queens and Staten Island, the email
read. That appetite for investment continues to-
day, not only for apartments, but for ofce prop-
erties as well.
Capital One Provides
325 Hudson Street Loan
The Mortgage Observer has learned exclu-
sively that Capital One Bank has provided a
$60 million loan to Jamestown Properties to
fnance its recent acquisition of 325 Hudson
Street, which it bought in April for $110 million
from a joint venture of Young Woo & Associates
and San Franciscos Bristol Group.
The loan closed in late July, and although
Jamestown declined to comment, Ben Stacks,
Capital Ones market manager for greater New
York commercial real estate banking, said it put
the permanent fnancing on the building follow-
ing Jamestowns all-cash purchase of it in April.
It was an approximately $60 million loan, Mr.
Stacks said, adding that the loan is for a fve-year
term. It represents another in a line of deals that
weve done with Jamestown. Were very excited
about our relationship with them. We view them
as one of our top-tier clients and we anticipate
doing more business with them in the future.
Jamestown added the 240,000-square-foot
Hudson Square property to a New York portfolio
that includes Chelsea Market, 530 Fifth Ave-
nue and 1 Times Square. Tenants at the tech-
friendly building include Empire State College,
Verizon and Level 3 Communications.
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repayment strategy and market competitive terms and pricing.
Visit cit.com/realestatenance
Matt Galligan, EVP/Group Head, 212-461-7740
6
News Exchange /September 2012
Thor Equities 590 Fifth
Gets $100 Million
Cushman & Wakefelds Equity, Debt &
Structured Finance team has arranged $100 mil-
lion in foating rate fnancing for Thor Equities
590 Fifth Avenue.
Thor Equities, headed by CEO Joseph Sitt,
bought the 19-story, 100,000-square-foot ofce
and retail building in 2007 from the Feil Orga-
nization for $90 million, according to data from
Real Capital Analytics. Tenants there include
AT&T and the NBA Store.
Dave Karson, executive managing director
of Cushman & Wakefeld Equity, Debt & Struc-
tured Finance, told The Mortgage Observer that
the loans terms exemplify the interest not only in
New York property in general, but in retail on low-
er Fifth Avenue in particular.
I think that Fifth Avenue in the 50s has al-
ways been the best retail corridor probably in the
country, Mr. Karson said. As of the last few years,
Fifth Avenue in the 40s is starting to catch up. He
attributes this, he said, to a hard line that used to
exist at Saks and Rockefeller Center that retailers
didnt want to cross.
Folks have realized that south of Rock Center
and Saks is also a very, very attractive market, and
the rents are half of what they are a block north,
he pointed out. So ... from 49th Street down to
40th Street youre seeing a lot of high-end, high-
rent-paying retailers moving onto that strip.
Mr. Karson said that the $100 million loan
a blend of mortgage and mezzaninewas a low
fve debt yield, which is a terrifc level of proceeds,
and it was done at a very favorable interest rate,
which I just think illustrates the demand for New
York City property right now. He declined to say
what the rate provided by the lender was, but said
that the bulk of the loan was the senior mortgage
component.
Other team members at Cushman on the deal
included Steve Kohn, Alex Hernandez, Kate Pe-
let and John Spreitzer.
A spokesman for Thor Equities didnt return
phone calls seeking comment.
Brookfeld Slaps New $270
Million Loan on 4 WFC
Brookfeld Ofce Properties has complet-
ed a $270 million refnancing of 4 World Finan-
cial Center, the 1.9-million-square-foot ofce
tower it owns as part of the World Financial Cen-
ter complex in Lower Manhattan.
The deal was done by a group of banks, a source
said, including Deutsche Bank, which is listed in
city records as providing the loan but was part of
a syndicate, according to the source. The source
said Deutsche Bank provided a quarter of the
debt, about $68 million.
Late last year, Brookfeld reached an agreement
to consolidate its ownership of 4 World Financial
Center, buying a 49 percent interest that was held
by Bank of America and its subsidiary Merrill
Lynch, which is also a tenant in the building. In
that deal, Brookfeld agreed to pay $264 million
for the banks stake and assume debt so that it
could gain full control of the tower, whose base it
is renovating as part of a sweeping makeover of
the complexs retail and public space.
A representative at Brookfeld did not return
calls seeking comment. The mortgage accounts
for less than half the roughly $634 million valu-
ation for the building that was set in last years
purchase of the minority interest, a conservative
level of leverage that is typical of real estate in-
vestment trusts.
Its not clear what Brookfeld will do with any
proceeds it generates from the new loan, but the
funds could be used to help fnance the over-$200
million retail renovation, which the company is
just beginning work on.
Brookfeld is also planning to break ground
this summer on a $300 million deck over work-
ing train tracks that lead into Penn Station. The
platform will allow for the construction of an up
to fve-million-square-foot, mixed-use develop-
mentwhich it is calling Manhattan Weston
the Far West Side. Daniel Geiger
Funding for Nazarian
Hotel Revealed
L.A. nightclub and hotel guru Sam Nazarian
has set his sights on the Midtown South submarket.
As the Wall Street Journal reported recently, Mr.
Nazarian will develop a boutique hotel at 444 Park
Avenue South, along with his partner, New York-
based Moin Development Corp.
The Mortgage Observer has learned that the f-
nancing for the project was arranged by HKS Capi-
tal Partners, in a mix of two types of fnancingone
of which, an EB-5, was a frst for the frm.
We actually secured the fnancing, which was a
blend of a frst mortgage from a conventional local
bank in a construction facility, and we paired it with
an EB-5 fnancing structure, said Ayush Kapahi, a
partner at HKS who worked on the deal. The inves-
tors behind the EB-5 are Chinese, Mr. Kapahi said.
It just so happens that the Chinese are heavily,
heavily the ones jumping onboard at this point be-
cause it does require for a family to be able to invest
$500,000 at a given time, so you need to have some-
what of a deep pocket in order to be able to pull of
the investment.
HKS provided close to $50 million for the project,
which will allow for the redevelopment of the site
and the start of construction on the planned 190-
key hotel. Mr. Nazarian and Moin Development
bought the site in August 2011 for $45 million.
They already acquired it, Mr. Kapahi point-
ed out. This is the refnancing, restructuring and
the construction component to get to a fnished
product.
Mr. Kapahi declined to reveal the name of the
lender involved in the transaction.
Asked about a time frame for the construction,
David Shenfeld, a vice president at Moin Develop-
ment, said that it is already underway.
Weve been doing demo and asbestos removal,
Mr. Shenfeld said. But we are starting to gut it next
week.
Steiner Equities Takes
$25 Million Loan for
Multifamily
Meridian Capital Group recently wrapped
up $25 million in acquisition fnancing for Steiner
Equities purchase of the Jardin, a 44-unit multi-
family building with retail space in the Williams-
burg section of Brooklyn.
The four- and fve-story buildings making up the
Jardin are located at 142 North 6th Street and
comprise 45,521 square feet of space in all. Read
Properties Inc. sold the building to Steiner Equi-
ties in June 2012 for $38 million, according to data
from Real Capital Analytics, which also indicated
that the lender is Sovereign Bank.
Meridian managing director Aaron Appel and
vice president Jonathan Schwartz negotiated
the 10-year, fxed-rate balance sheet loan.
The sponsors deep knowledge of the market,
Relationship lending
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Untitled-34 1 8/30/12 12:28:49 PM
8
ElsEwhErE...
paired with the spectacular location of the prop-
erty, was extremely benefcial in working to quick-
ly close this fnancing in under three weeks, Mr.
Schwartz said about the deal.
For his part, Mr. Appel added that the transac-
tion highlights how Meridians strong relationships
and market expertise allow us to quickly obtain f-
nancing that is tailored to the clients needs.
The Jardin, which includes two retail spaces,
was originally slated to be developed as condos but
was changed to rentals before all the units sold. It
has since been fully leased at an average rent of
$53 per square foot.
Meridian was able to arrange the loan within a
tight 18-day time frame, the frm said.
Loan Forthcoming for
Carlton House Condo
Conversion
The Mortgage Ob-
server has learned that a
$200 million refnanc-
ing of the Carlton House
condominium conver-
sion is in the works. Bank
of America is in talks
with partners Angelo,
Gordon & Co. and Extell
Development to provide
the fnancing, though the
loan hasnt closed and terms werent available.
The refnance coincides with the JVs agreement
to sell the 33,389-square-foot retail condominium
at the site, located at 680 Madison Avenue, to Vor-
nado Realty Trust. The REIT will pay $280 mil-
lion for the retail there, according to reports.
The estate of Leona Helmsley sold its leasehold
interest in the Carlton Housea former hotelto
Extell Development and Angelo, Gordon & Co. in
2010, setting the ball rolling.
Adam Schwartz, a managing director and head
of Real Estate at Angelo, Gordon confrmed that
talks were underway about refnancing the condo
conversion, which is expected to result in upwards
of 70 luxury apartments.
Were working with them on potentially re-
fnancing the Carlton House transaction, Mr.
Schwartz confrmed, adding that the fnancing
would either refnance Carlton House as a whole
or infuse the condominium conversion project
with money to fund construction.
This fnancing would come on the heels of an ac-
quisition loan that Bank of America provided for
Angelo, Gordon & Co. for a Gramercy Park ofce
and retail project.
Massey Knakal Capital services
Arranges $21 Million loan for
New York Clients Miami retail
The Mortgage Observer has learned exclusively
that Massey Knakal Capital Services has followed
a New York-based clients needs to the Sunshine
State, arranging a $21 million loan for a retail prop-
erty on Miami Beachs Lincoln Road. Wells Fargo
provided the 10-year, 4.5 percent loan to the spon-
sor, Aurora Capital Associates. The loan-to-value
ratio is 70 percent.
Garrett Thelander, managing director at MKCS,
and director Morris Betesh worked on the trans-
action. Joseph Tufariello, a managing director at
Wells Fargo, worked on the banks end, the duo said.
This was actually a loan that I had originated at
Anglo Irish Bank, Mr. Thelander told The Mort-
gage Observer. So I had an existing relationship
with Aurora Capital. Mr. Thelander joined Massey
Knakal Capital Services in 2011 after working as an
executive vice president at Anglo Irish Bank, where
he helped set up the New York ofce.
The original loan was a $17 million acquisition
loan that was coming due in 2012.
The sponsor, Aurora Capital Associates, had done
a great job repositioning the retail by upgrading the
tenancy and increasing the rents to market rate,
Mr. Betesh explained. The high debt per square foot
is a testament to the strength of the Lincoln Road re-
tail corridor and the sponsors proven track record
of managing high-end, urban retail assets. The debt
per square foot Mr. Betesh mentioned was $1,400.
Though Messrs. Thelander and Betesh declined
to reveal the address of the Aurora Capital Asso-
ciates building, Lincoln Road as a whole is a major
shopping destination in the city and it has been the
site of much interest lately on behalf of New York-
area real estate frms. In early July, for instance,
REIT Vornado Realty Trust announced that its
Vornado Capital Partners fund had bought 1100
Lincoln Road, which is 97 percent leased to retail
tenants like Regal Cinemas and Anthropologie.
The fund bought the 167,000-square-foot property
for $132 million.
Because of the value inherent in such a retail area,
Mr. Thelander noted that MKCS had found a lender
here that was very familiar with Lincoln Road. Mr.
Betesh, meanwhile, emphasized the importance of
the lenders familiarity with the area as well, saying
that others were maybe not able to get their arms
around the high value per square foot.
Adam Schwartz
P
h
o
t
o
: F
l
i
c
k
r
U
s
e
r
d
i
g
i
t
a
l
k
u
n
d
e
140 W 57th St. NYC, NY 10019 T +1 212 867 1234 Contact Eli Braha
(ebraha@berkleyacq.com)
BerkleyAcq.com
BERKLEY ADDS...
BERKLEY | ACQUISITIONS

INTERNATIONAL CONSULTING
ANALYTICAL UNDERWRITING
ADVISORY SERVICES
Untitled-4 1 8/31/12 2:38:30 PM
10
MiscEllaNy
Prudential Mortgage
Capital Kicks Of New Arm
with $108M Loan
Newark, N.J.-based Prudential Mortgage
Capital Co.s European business arm has completed
its frst piece of fnancing since launching in January
2012. The company said in June that it had provided
a $108 million commercial real estate loan, secured
by a portfolio of four Central London ofce proper-
ties and grocery-anchored retail in the town of Bath,
which is just over 100 miles west of London.
Its a signifcant frst step on the road to the com-
panys targeted $500 million in long-term, fxed-rate
senior debt transactions for 2012, it said. The debt in
these transactions will be denominated in local cur-
rency, bringing this frst one in at 69.5 million.
The diversifcation we can achieve by investing a
portion of our portfolio outside of the U.S., whether
its Europe, Japan or Mexico, is very valuable, said
Thor Orndahl, a managing director at the company
who oversees its non-U.S. mortgage platform. The
current market dislocation has provided the opening
we have been looking for, and our plan is to be active
in Europe for many years to come.
The company will sidestep the most troubled re-
gions of Europe, focusing instead on ofce, logistics,
multifamily and retail in large German cities as well
as London and Paris. Local banks may collaborate on
structuring the loans.
Greystone Servicing
Corp. Arranges $21M
Afordable Housing Loan
New Yorks Greystone Servicing Corp. said
recently that it has arranged a $21 million loan f-
nanced by the Freddie Mac Targeted Afordable
Housing Mortgage Program for 350 units of af-
fordable housing in Willimantic, Conn.
The complex, Windham Heights, located at 202
Scott Road, is owned and managed by Vesta Cor-
poration, which manages roughly 4,000 total units
in Connecticut, Ohio, New Jersey, Indiana and D.C.
Sources indicated it was renovated as recently as
2005 and that the refnancing is for about 10 years.
Working with Freddie Mac allows us to further
reach customers through a multitude of high-qual-
ity products, said Jef Englund, who led Grey-
stones afordable housing team on the deal. As
Greystone works closely with a number of mort-
gage-purchasing enterprises, we are able to ofer
the best programs for our clients, and we are excited
to continue working closely with Freddie Mac and
our other partners to serve the multifamily mort-
gage needs of the country.
M&T Bank said Monday that it had entered
into a defnitive agreement to acquire Hudson
City Bancorp for $3.7 billion in stock and cash.
The acquisition will see Hudson City merge into
an M&T subsidiarygiving M&T access to 135
new branch locations in New Jersey, New York
and Fairfeld County, Conn. The deal would make
for the largest bank
merger of 2012 so far.
The boards of di-
rectors of each bank
have approved the
merger, which is now
pending regulatory ap-
proval and approval
by the shareholders of
each company.
According to an in-
vestor presentation
about the merger available online, the merger
will greatly diversify Hudson Citys monoline res-
idential mortgage focus99 percent of its portfo-
lio as of June 30, 2012. It will create a pro forma
commercial real estate platform of $17.9 billion,
providing the biggest boost for M&T, however, in
the area of residential mortgages.
M&T, which was established in 1856, and
Hudson City, founded in 1868, have been serv-
ing their customers and communities for gener-
ations, and we look forward to building on that
long history and tradition together in the future,
M&T Chairman and CEO Robert Wilmers said
in a prepared statement about the merger.
As a thrift, Hudson City focused primarily on
deposits and mortgages, Wilmers continued.
M&T will build on Hudson Citys loyal custom-
er base to create a comprehensive community
banking franchise that provides a full range of
checking and savings accounts, debit and cred-
it cards, home equity loans and other lending
options, plus small business and commercial
banking services and our premier wealth man-
agement and corporate trust solutions through
Wilmington Trust.
M&T acquired Wilmington Trust in late
2010.
Hudson City Chairman and CEO Ronald
Hermance, Jr. said that the merger creates
tremendous opportunities to build on the suc-
cesses that each company has achieved individ-
ually in its own markets.
M&T is headquartered in Buffalo, N.Y. and has
$80.8 billion in assets. Post merger, the banks
pro forma balance sheet is anticipated to in-
crease by roughly $28 billion, it said.
Trepp: CMBS Delinquencies
at Record High
Another month, another all-time high
CMBS delinquency rate, according to data from
Trepp. The companys July 2012 U.S. CMBS De-
linquency Report showed $59.5 billion in CMBS
loans are now delinquentclassified as 30 days
or more in arrears. This figure doesnt include
loans past the balloon date but current on inter-
est payments.
The rate for July moved up 18 basis points to
10.36 percent, from Junes 10.16 percent, leav-
ing $75.4 billion in loansnearly 4,000 in allin
special servicing.
The July results seem to go against what Trepp
predicted a month earlier, when senior manag-
ing director Manus Clancy said that, with most
of the 2007-vintage loans already past their ma-
turity dates, the worst might be behind us.
Just as the heat should break by September,
investors should see some relief, too, Mr. Clan-
cy predicted. Now that most of the 2007 loans
coming due in 2012 have passed their maturity
date, the delinquency rate should start to level
off soon.
In light of the July numbers, Mr. Clancy said
that Trepp doesnt expect much improvement
over the next few months. We dont anticipate
many more increases in the rate over the next six
months, he said. The loans that were unable to
refinance over the last year will continue to lin-
ger with the special servicers.
Retail was the only asset type to see improve-
ment in July, its delinquency rate dropping to
8.03 percent for the month from 8.17 percent the
month previous.
Robert Wilmers
M&T Bank set to acquire Hudson
city Bancorp for $3.7 Billion
11
September 2012 / In-Depth Look A comprehensive look at CRE finance trends
R
ecord-low mortgage rates have helped to
fuel renancing activity for residential
homes. In July, the number of mortgage
applications led hit a three-year high. Freddie Mac
also reported that 30-year, xed-rate mortgages
averaged 3.49 percent for the week ending July 26.
Likewise, attractive rates are fueling nancing in
the multifamily market, where nancing for low-
leveraged rental buildings has reached its lowest
levels in decades. The result? Fierce competition
among lenders looking to provide nancing for the
asset class, particularly in the Big Apple.
Interest rates as low as 3 percent for ve-year
nancing, 30 to 35 year amortization at par, non-
recourse are being oered. And borrowers are taking
advantage of seven- and 10-year xed-rate nancing,
which is being oered below 4 percent.
Commercial/multifamily mortgage origination
volumes during the second quarter of 2012 were up
25 percent compared with second-quarter 2011 levels
as well, according to a Mortgage Bankers Association
survey that also charted a 39 percent increase from
the rst quarter of 2012.
Commercial and multifamily mortgage lending
and borrowing continued to pick up in the second
quarter, said Jamie Woodwell, MBAs vice president
of commercial real estate research. Every major
investor group increased their lending.
In fact, each and every day, lenders from around
the region are knocking on the doors of owners of
rental properties oering low-cost nancing. Some
of the newest for this asset class include Connecticut-
based Peoples United Bank and Montebello, N.Y.s
Provident Bank.
We are focused on growing our commercial
real estate business, particularly in the multifamily
segment, across the metro New York market, said
John Costa, executive vice president, commercial
banking for Peoples United Bank.
Competition is, and will remain, keen for these
new entrants who will have to oer exceptionally low
rates to compete with leaders like Investors Bank.
We were fortunate to begin nancing multifamily
apartment buildings back in 2008 before it became
the lending choice for many banks, said Domenick
Cama, senior executive vice president and COO of
Investors Bank. While its true the combination of
lower rates and more competitors has driven down
spreads, we remain committed to this business.
One of the most active lenders to this asset class is
the commercial term lending division of JPMorgan
Chase. The head of East for CTL, Jason Pendergist,
said, Our Chase commercial term lending business
provides the greater New York-area, Boston, D.C. and
Philadelphia markets with term nancing to owners
and investors of income producing buildings with
ve or more units.
Astoria Financial, the holding
company for Astoria Federal
Savings and Loan Association,
joined the ranks of lenders for
this asset class in 2011. It reported
in its latest earnings report that
from March 31 to June 30, 2012, its
combined multifamily commercial
real estate loan portfolio increased
by $361.2 million, or 58 percent
annualized, to $2.8 billion.
New York Community Bank
continues to be number one
in the New York City region
for multifamily. The company
reported as of June 30, 2012 that
multifamily loans were up $417.1
million from March 31 and $753.5
million from December 31. And it
had approximately $1.8 billion in
the pipeline.
James Carpenter, senior executive vice president
and chief lending o cer at New York Community
Bank, said that the bank has been a leading
multifamily lender in the area for decades. While
there have been many market participants over
the years, no one has remained as consistently
committed to multifamily nance, he said.
Multifamily properties are a preferred asset class
for Mercantil Commercebank because of their low
risk prole and acceptable risk-adjusted returns,
said Paulo Garcia, vice president of commercial
real estate at the bank. This is particularly true for
New York City, where the multifamily market held
up and, in fact, continues to climb to new record
highs.
Loans on commercial real estate, especially for
multifamily residential properties, helped Signature
Bank log a record $45.3 million in net income for the
second quarter of 2012. Loans at the bank increased
$664.9 million, or 9 percent, to $8.03 billion for the
second quarter. Over the rst half of the year, they
grew $1.8 billion, or 17.2 percent. Not surprisingly,
the increase in loans was primarily driven by growth
in commercial real estate and multifamily loans, as
well as by the launch of the banks specialty nance
business.
The banks are also in constant
competition with the GSEs.
One of the most active players
in the GSE arena is Beech Street
Capital. Its interesting how
strong it is, despite persisting
unemployment and at income
growth, said Mike Edelman,
senior vice president, production
management at the rm. A lot
has to do with demographics.
You also have the disruption
associated with the housing
crisis, so theres a lot more renters
by choice.
Also a factor is the resurgence of
nancing from Wall Street CMBS
and conduit lenders. Competition
is keen from Deutsche Bank,
Cantor Commercial Real Estate,
JPMorgan and Ladder Capital, as
well as Goldman Sachs.
Record-low nancing is fueling the investment
sales market, too. This is the best investment sales
market we have seen in ve years, said Robert
Knakal, chairman of Massey Knakal Realty Services.
Nonetheless, while rates fell to record lowseven
below 3 percent in Julythere are clouds on the
horizon. During the rst 15 days of August, pricing
of the 10-year Treasury note rose 30 basis points.
And higher yields on these notes will result in higher
costs for long-term nancing and impact investment
sales.
But for now, as rates continue to be at all-time
record lows, prudent borrowers should, and will,
lock in long-term permanent nancing for all asset
classes.
Record-low rates are keeping area lenders busy.
Competition Hot in Multifamily
by Michael Stoler
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TMO.0912.CS3.InDepthLook.indd 11 8/30/12 12:25:49 PM
12
Q&A /September 2012
by Carl Gaines
Jerry Swartz
HKS Capital Partners
The Mortgage Observer recently spoke to Jerry Swartz, who last year
struck out on his own to found HKS Capital Partners after almost 40 years
at Pergolis Swartz Associates. He shared what motivated him to wind
something up, at an age when most might be focused on winding down.
The Mortgage Observer: You were a founding
partner at Pergolis Swartz. How did you get
your start in the business before that?
I was in the manufacturing business and in 1970,
I think it was, there was a credit crunch and the
entire industry did not do well and we closed that
business up and I was looking for something. At
the time I was in contract on a house. I had my frst
wife and two young kids and when I closed that
business up, I had no means of closing on the house,
I had no means of income and I needed something
that was going to generate income for me quickly.
A friend of mine was in the real estate business
and I spoke to him about it and he told me that I
should get into brokerage because, once you learn
the business, youre generating fee income and as
soon as you can close its faster. I was nave enough
to go with that and I went to Sonnenblick Goldman
and I got a job there on straight commission.
It was very enlightening because I really didnt
knowother than the mortgage I was going to get
on the house I was in contract onI didnt know
what a mortgage was. But it was a great shop. I
listened. I learned. I remember in the beginning
when I would make a cold phone call and someone
would ask me a question, I remember specifcally
someone asking me what the current prepayment
penalty is on a mortgage. And I said, You know
what, Ive got another call coming in. Let me call
you right back. And I went and asked one of the
other brokers what a prepayment penalty was.
Thats how basic. I really did not know anything.
But anyhow I learned, and within six months I had
some closings and made some nice money, and the
next year I doubled that income and so on and so
on and so on and it was great. I was there for four
or fve years and then I met Richard Pergolis there.
In 74 or 75 we formed Pergolis Swartz, and 40
years later, or whatever it was, in 2011, we started
this company, on April 1 of 2011.
What was it about the market that made you
think it was a good time to start something
new in 2011, and how long had you been
thinking about doing that?
The market was beginning to get a little better.
I wouldnt say it was good enough to launch a new
business. However, what happened at the other
frm was a philosophical diference between my
partner and mejust in the way that the business
was done and in the approach that each of us took.
Even geographically within the ofce. We had
5,000 square feet of space; I was literally in the
back, he was all the way in the front. And a lot of
the young brokerswe didnt have a lot of brokers,
but the ones we had, Ayush [Kapahi], for example,
and John [Harrington], the two who came with
mewere in the back. And I kind of morphed into
deals with them because they were there and they
were in my ofce a lot and we talked about deals.
How competitive is the environment now? Has
it gotten more competitive over the years?
It has. What happens is that the direction of the
market dictates the competitiveness. When the
market heats up and more and more transactions
are getting done, like any other business, excess
profts breed ruinous competition. I dont know.
I didnt make up the statement. I dont know
whether it was Baruch or somebody, but thats
what happens. And as the market heats up and
more and more deals get done, well, attorneys
who may not be too busy in their legal business
say, Hey, Im a broker. I can do deals. So in that
respect, yeah, it does get busier and well all of a
sudden be competing against somebody who Ill
say, Geez, Ive been in business a long time and
Ive never heard of them. It might be a startup
business or not even a brokerage business per se.
But someone like Massey KnakalI know they
have opened up a fnance business. And Eastern
Consolidated, I believe they have their own. Its
obviously an additional source of income, a new
proft center, so, yes, as the market gets better I
think the competition heats up. Of course.
Are you seeing more construction deals? Are
they picking up?
A lot. The construction loans, not as many
ground-up construction loans. A number of
conversions, renovations, a number of bridge
loans, obviously, where there may be a value-
added scenario or a structured-fnance scenario
to the transaction. You know, someone might
be adding a new tenant or renovating existing
apartments or enlarging certain apartments. A
lot of those. We have not seen as many note sales
as we did two years ago, which doesnt necessarily
mean that that particular segment of the market
has evaporated. Im sure that there are still
plenty of toxic loans that need to be worked out.
Certainly CMBS is going to have a lot of loans
coming up very soon, but in terms of the number
of loans that we saw to fnance acquisition of
loans, we havent seen that many of those lately.
Do you see doing this for the immediate
future? Any plans to slow down?
I see doing it until I fall down on the desk and
they carry me out, feet frst. As I said before, its
something I can do from anywhere with emails
and the computer and the iPad.
You just need to stay busy?
I do. I get bored quickly. I guess Im a Type-A.
Interestingly enough, pretty much all the brokers
are the same way. You kind of have to be in this
businesshave that kind of personality. Well, it
works if you do have. Thats what it is. At times I
will sit on the deck overlooking the ocean and its
just incredible. But I cant do it for a long time
Ill get bored. Or Ill be planning in my mind what
Im going to do next.
Jerry Swartz
TMO.0912.CS3.Q+A.indd 12 8/30/12 12:32:03 PM
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Untitled-5 1 8/28/12 11:37:51 AM
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14
Scheme of Things /September 2012 Monthly charts of commercial real estate financings in the boroughs
The Mortgage Observer has compiled a
monthly snapshot of top commercial real es-
tate fnancings in New York City. This month
we take a look at refnances versus purchases,
top recent lenders, total sales by borough and
the six ZIP codes that saw the most action,
though several tied in July. Data are drawn
from Actovia, which tracks mortgage informa-
tion and streamlines leads from city records.
Mortgage Charts
310
85
Refnances were up in June from Mays 736 to a high of
1,095. They then dropped sharply in July, down to just 310.
Purchases were down in July as well.
JUNE JULY
REFINANCES
JUNE JULY
PURCHASES
10003 36 11211 13
10009 32 11215 12
10002 30 11218 9
11201 29 10457 8
11211 29 11219 8
10458 26 10031 8
11101 8
ZIP CODE JUNE 2012 ZIP CODE JULY 2012
The 11211 ZIP code, comprising much of Williamsburg,
regained the top spot for fnancing activity in July.
According to Actovias data, however, fnancings were
down across all the top ZIP codes for the month..
JUNE JULY
BRONX
JUNE JULY
ALL
JUNE JULY
MANHATTAN
JUNE JULY
BROOKLYN
JUNE JULY
QUEENS
Total sales dropped precipitously in July in all the boroughs. June saw 1,115 sales in Manhatan, the Bronx,
Brooklyn and Queens, yet this fgure dropped all the way to 394 for July. The Bronx registered the fewest
sales in the month of July, with just 52.
394
116
52
154
72
New York Community Bank maintained the top spot for lenders in the New York area for both June and July. See
this months In-Depth Look (page 11) for insight into how lenders are vying for chunks of the regions multifamily
fnancing. It details how several of the lenders on this list are making inroads.
New York Community Bank 93 New York Community Bank 45
Astoria Federal Savings Bank 84 JPMorgan Chase 39
JPMorgan Chase 73 M&T 35
Signature Bank 60 Capital One 24
Capital One 55 Signature Bank 21
Dime Savings Bank of Williamsburgh 46 Astoria Federal Savings Bank 13
M&T 28 Dime Savings Bank of Williamsburgh 12
Investors Bank 26 Wells Fargo 10
Flushing Savings Bank 24 Sovereign Bank 7
Apple Bank 20 Flushing Savings Bank 6
BANK JUNE 2012 BANK JULY 2012
Refnances vs. Purchases
Most Active ZIP CodesFinancing
Top 10 Lenders
Total Sales by Borough
TMO.0912.CS3.SchemeOfThings.indd 14 8/30/12 3:06:07 PM
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Untitled-32 1 8/30/12 12:12:10 PM
16
The M.O. Columnists /September 2012
Steins Law
Joshua Stein
A
multistate developer wanted to set up a
credit line secured by mortgages on a few
available properties, one in New York City.
Knowing from experience that New York State had
a mortgage recording tax, the developer resigned
itself to paying that tax as the price of
using New York property as collateral.
The developer reluctantly prepared to
write a fve-digit check to support New
Yorks various governments.
Then the developer started to move
toward a closing. Someone saw the word
revolving in the developers credit
line agreement. The loan documents
allowed the developer to borrow on the
credit line, repay and then borrow again
to meet the developers cash needs. The
developer soon learned that this meant
it would, in theory, owe a mortgage recording
tax both for the initial closing and borrowing of
the loan, and then again every time it repaid and
borrowed. The state tax ofcials take the position
that once any mortgage loan has been repaid, even
temporarily, any additional borrowing of that loan
incurs another tax.
How New York State
Shoots Itself in the Foot on
Revolving Mortgage Loans
Unfortunately, the developer contemplated
using its secured credit line just like any other
revolving credit line. The developer would borrow
and repay multiple times over the course of a year. If
this required the developer to pay a tax every time,
then payment of the tax would dwarf all
other borrowing costs. The tax amounts
to 2.8 percent of each borrowing. The
tax would simply make it impossible for
the developer to use the credit line.
Given the business deal with the
developers lender, someone suggested
that the developer could limit the New
York piece of the revolving loan so it
falls within a $3 million safe harbor
in the New York tax law. Thats a special
provision that says revolving loans
below $3 million dont incur multiple
taxes with each repayment followed by another
borrowing.
If a revolving loan as a whole amounts to $3
million or more, though, then the safe harbor wont
apply even if the New York mortgage secures only
some smaller piece of the loan. The New York
collateral needs to secure the entire loan, which
must be less than $3 million. Moreover, as a price of
qualifying for the safe harbor, the borrower must, in
practice, pay of and release the mortgage when the
borrower sells the property, losing the opportunity
to deliver to the buyer a tax-paid mortgage, for
which the buyer may pay a little extra at closing.
Other technical restrictions on availability of the
safe harbor also made it difcult for the developer
to use.
Before long, the developer threw up its hands,
and decided not to record a New York mortgage
at all. It just cost too much and created too many
problems to have New York real property secure
a revolving loan. So, instead of writing a fve-digit
check to pay mortgage recording tax, the developer
saved some money. And the New York taxing
authorities received zero instead of the check
for mortgage recording tax the developer would
have reluctantly paid if New York accommodated
revolving mortgage loans.
This all happened because New York law and tax
ofcials cling to a hyper-technical interpretation
of the mortgage recording tax. They insist that any
repayment and additional borrowing of a mortgage
loan incurs a new tax. In practice, that means New
York real property cant secure revolving loans,
because no sane borrower will pay another 2.8
percent tax every time it borrows again. And, as a
result, New York efectively turns down whatever
mortgage recording tax payments the state could
collect if the mortgage recording tax accommodated
revolving loans.
As the easiest way to accommodate revolving
loansi.e., to make it practical to use New York
real estate to secure themthe state could expand
the safe harbor so it applies to all revolving loans.
Ideally the state could also cut away some of the
technical issues that limit the practical usefulness
of the safe harbor. The state could, in efect, say that
if a loan is in fact a revolving loan, then it only incurs
mortgage recording tax once, not multiple times.
New York State must think that todays
interpretations of the mortgage recording tax
will somehow allow the state to collect multiple
iterations of mortgage recording tax on any
revolving loan. In practice, what really happens is
New York real property doesnt secure revolving
loans, so no one pays any mortgage recording tax at
all on them.
If the state fxed its treatment of revolving loans,
this would not only raise a bit of money, it would also
encourage at least one type of commercial real estate
fnancing that is commonplace outside New York.
What does New York have against revolving
mortgage loans?
Joshua Stein is the sole principal of Joshua Stein
PLLC. The views expressed here are his own. He can
be reached at joshua@joshuastein.com.
TMO.0912.CS3.Columnists.indd 16 8/30/12 12:21:51 PM
17
September 2012 / The M.O. Columnists
The Basis Point
Sam Chandan
Lenders Press Forward,
but Outlook for CMBS
Remains Reserved
C
ommercial real estate lenders are growing
more confdent, or at least more inclined
to resume risk-taking. Bucking head
winds from the weaker economy and job market,
underwriting standards for loans on well-positioned
assets eased in the second quarter and through
the summer. Competition to fund high-quality
borrowers showed increasing spillovers from the
febrile apartment sector, with a small but growing
number of development projects and cash-out
refnancings registering alongside new ofce, retail
and hotel mortgages.
From the vantage points of operating,
investment and lending, apartments
continue to set the high bar. Long-
term fxed-rate fnancing for stabilized
apartments fell to a national average of 4
percent in the second quarter, the lowest
on record. For larger and higher-quality
assets, rates are lower. In New York
and Washington, D.C., in particular, the
prevailing notion that lending spreads
are in line with historically supportable
levels is being tested. As risk-free rates
skirt bottom, we should expect a far-
sighted market to ofset with wider cushions. For
some lenders, competitive pressures from peers and
from the sector-dominant agencies are clouding the
long view and limiting risk-based pricing power.
Short-term risk metrics refect the apartment
sectors strong cash fow momentum. Even as debt
yields inched lower, the combination of cash fow
gains and lower rates allowed debt service coverage
to improve slightly in the second quarter. But more
comfortable measures of term risk belie the elevated
maturity risk embedded in the most aggressively
priced loans. Too many loans in the second quarter
assumed a new normal in the interest rate
environment while also afording a healthy uptick in
cash fow growth.
Baseline projections for interest rates anticipate
10-year Treasury yields in the vicinity of 4.5 to 5
percent when todays new permanent fnancings
mature. In a moderate economic growth scenario
in which the economy expands below its potential
rate, that is a reasonable working assumption. Even
though Treasury yields have generally been falling
for more than three decades, they were fairly steady
at just below 5 percent in the years leading up to the
fnancial crisis. However difcult to imagine today,
higher rates will be even more difcult to digest
at refnancing, in particular for the rising count of
apartment loans with up-front interest-only periods.
The lender landscape is not as sparsely populated
as it was a few years ago. Banks with
healthy balance sheets and even
healthier regulatory relationships are
continuing to support their legacy
borrowers needs and are slowly
engaging new business. Underwriting
standards suggest that banks are betting
the economy will strengthen, though
bets are being hedged on the rising tide
lifting value-add assets. Life companies
are dominating opportunities to fund
large loans for public REITs and other
liquid borrowers. The agencies are
ceding some share of apartment lending but have
seen the absolute volume of their apartment lending
programs hold steady or increase.
The CMBS outlook is less sanguine, principally
as a result of bond investors shifting tastes and
tolerances. Securitization volume inched up just
6 percent in the frst half of 2012, though the pace
has improved, with third-quarter deals through
mid-August pushing volume closer to $25 billion.
There are currently eight deals on track to price in
September and October, with a projected average
pool balance in the range of $1.2 billion. On its
current trajectory, issuance will fall short of $40
billion in 2012, up from last year but still just a
fraction of the markets potential.
Even as some master servicers struggled with
excess capacity, limited CMBS volume is supporting
a rally in bond prices. After widening unremittingly
over the course of the second quarter, spreads
have narrowed in the weeks following the most
fretful moments of the sovereign bond crisis, when
corporate spreads opened up. For the time being, the
more recent improvement in CMBS trends is being
read as a signal of the markets appetite for more.
It remains unclear how much spreads will widen if
volume picks up or the European dilemma reasserts
itself in force, requiring higher yields from all risky
investments. Europes current dtente has come too
late to stave of recession in the United Kingdom and
on the Continent. The semblance of a return to order
will give way yet again if German ordoliberalism and
demands for austerity do not bend for its restive and
increasingly unemployed neighbors.
Current assumptions could also be upset if
conditions in Europe improve substantially. Rock-
bottom treasury yields refect global risks and are
not a vote of confdence in American fscal policy
under either presidential-election scenario. The
Feds readiness to accommodate is not in question,
but monetary policy will strain to hold long-term
rates anywhere near current levels if investors
perceptions of global risk improve.
The vagaries of the bond market and the ever-
present potential for disruptive reforms are not the
only qualifers to the CMBS outlook. For investors in
search of diversifcation, the overweighting of pools
to anchored and unanchored retail properties is
also a consideration. If conduit lenders had perfect
foresight into the long-term performance of their
originations and if the ratings models were equally
prescient, the underwriting standards would adjust
in kind to refect the risks of each retail loan.
In practice, investors that have been active in
buying recent CMBS may become wary of the
idiosyncratic risks associated with overexposure to
the retail sector. By dollar volume, almost 40 percent
of second- and third-quarter CMBS was in the retail
sector. Diversifcation into apartment loans might
enhance the investment attractiveness of new deals,
but conduit lenders are not typically positioned to
compete with agency lending and the advantage
conferred by the guarantee.
Pricing in early August, a $1.3 billion Deutsche
Bank and Cantor Fitzgerald deal ofered investors
an opportunity to diversify their new issuance
holdings toward ofce exposures. Less than one in
four dollars was backed by retail property income,
one of the smallest shares of any deal this year. If
the conduit is to reassert itself in force, it will have
to follow that lead and stave of its recent niche
persona.
Sam Chandan, Ph.D., is president and chief
economist of Chandan Economics and an adjunct
professor at the Wharton School. The views expressed
here are his own. He can be reached at dsc@chandan.
TMO.0912.CS3.Columnists.indd 17 8/30/12 12:22:11 PM
Prior to his new position, Mr. Gluck was a free-
lance consultant for high-net-worth real estate
investors.
Eastern Union Commercial, the privately
owned commercial mortgage company, has hired
Avi Pilchick as the frms chief operating ofcer,
a new position within the frm.
Mr. Pilchick, who most recently served as a se-
nior executive at a Pennsylvania real estate ven-
dor, will be assuming a corporate role within the
company, allowing company president Ira Zlo-
towitz, managing partner Abe Bergman and
other brokers to focus on deal-making.
As COO, Avi Pilchick will strengthen our cor-
porate infrastructure, policies and procedures to
ensure that brokers have the information, tools
and staf support they need to fulfll our core mis-
sion: providing clients with the best customized
loans and terms on every transaction, said Mr.
Zlotowitz.
With Avi concentrating on Eastern Unions
internal mechanisms, our brokers can focus with
even greater efciency on every detail of every
loan and arrange creative fnancing solutions
ideally structured to address the many nuances
of each individual loan.
Studley has hired
Heidi Learner as
chief economist, it was
announced last week.
Ms. Learner, an 18-
year Wall Street veter-
an who most recently
served as a vice presi-
dent of State Street
Corp., will now be re-
sponsible for develop-
ing real-time measures of supply and demand for
commercial space to assist Studleys clients in un-
derstanding the continually evolving economics
of the real estate markets.
Heidis arrival elevates our service capabili-
ties, said Studley president Michael Colacino.
Her proven ability to measure real-time eco-
nomic variables and assess their impact on mar-
kets will help our clients make better real estate
decisions. She will enhance Studleys reputation
for having the best analytics in our industry.
Before her position at State Street, where she
created quantitatively based global fxed-in-
come trading strategies, Ms. Learner worked as
a bond portfolio manager at MEAG New York
Corp., where she directed interest rate trading
for Munich Res $38 billion portfolio of assets.
Prior to those positions, she worked at both
Barclays Bank and Salomon Brothers.
Heidi Learner
United Realty Part-
ners has named Dov
Shimanowitz as exec-
utive vice president of
operations for its advi-
sory division, United
Realty Advisors LP.
[Mr. Shimaowitz]
not only brings an ex-
tensive real estate background to United Realty,
but he also has a unique combination of strate-
gic business planning and execution experience
as well as expertise in sales and marketing, said
Jacob Frydman, chief executive ofcer. He is a
valuable addition to our team as we look to make
strategic real estate investments on behalf of our
clients.
Mr. Shimanowitz will oversee United Realtys
strategic plan, business development, compli-
ance and client relations. His responsibilities also
include coordinating investment-ofering docu-
ments and flings across all of the frms afliates.
Walker & Dunlop announced Michael
Vaughn as the senior vice president of the com-
panys FHA fnance health care division. Mr.
Vaughn will serve as the head of the department
and manage origination, underwriting and qual-
ity control of health care loans.
We are excited to welcome Michael to our
FHA fnance team, which has grown signifcant-
ly over the past year. Michael is a seasoned and
highly respected professional in the health care
fnance sector and bringing him onboard is a sig-
nifcant opportunity due to the knowledge and
experience he developed as director of the LEAN
health care division at HUD, said Michelle
Warner, senior vice president of FHA fnance at
Walker & Dunlop.
Prior to his new position, Mr. Vaughn was
worked as a director of the Ofce of Residen-
tial Care Facilities for the U.S. Department of
Housing and Urban Development.
One of Americas largest privately owned
mortgage companies, Eastern Union Commer-
cial, has welcomed Jake Gluck to assume the
role of director of lender relations.
Jake Gluck will devote his time and attention
to understanding how each lender operates, the
details and nuance of how they structure their
loans and how their policies, decisions and per-
sonnel change, no matter how small, said Ira
Zlotowitz, president of Eastern Union Com-
mercial. All of these factors can impact the fnal
loan.
Jonathan Horn has
joined the Besen Group
as executive managing
director of the special
assets group. Mr. Horn,
who previously founded
Helios Capital Advi-
sors and was directly re-
sponsible for over $500
million UPB of small-
balance residential and commercial mortgage
loans, will now oversee day-to-day operations in the
Besen Groups new ofce in Red Bank, N.J.
We are pleased to have such an experienced
industry leader at Besen heading this specialized
segment of the market and to further expand our
team, stated Michael Besen, chief executive of-
cer of the Besen Group. Jonathan has a noteworthy
track record and is well-regarded in the mortgage
loan and investment community.
The Besen Group specializes in the disposition of
small-balance residential and commercial loans in
the secondary market and will operate a full-service
advisory and brokerage ofce in the new location.
The nonproft afordable housing advocacy group
National Housing Conference has named a new
president and CEO, Chris Estes.
I am honored with this extraordinary opportu-
nity to lead NHC during this critical period, Mr.
Estes said. There is a new urgency around hous-
ing issuesa level focus we have not seen for many
years. I aim to make NHC a stronger leader on
housing issues, bringing my own experience to ex-
pand on a strong tradition.
Before NHC, Mr. Estes worked for nine years as
an executive director at the North Carolina Hous-
ing Coalition.
Marcus & Millichap Real Estate Investment
Services has promoted Glen Kunofsky to execu-
tive vice president, investments. The position is the
highest level for investment professionals at Mar-
cus & Millichap.
Mr. Kunofsky joined the frm in the summer of
2001 and was promoted to senior vice president in
the summer of 2008.
Glens promotion to executive vice president
investments is a testament to his extensive knowl-
edge of the net-lease market, his superior transac-
tion expertise and his unwavering commitment to
client service, said president and CEO John Ker-
in. His thorough understanding of sale-leaseback
transactions and the depth of his net-leased asset
disposition experience make him a tremendous re-
source for our retail investment clients.
18
Work Force /September 2012 Hirings, promotions, defections and appointments
Dov Shimanowitz
Jonathan Horn
TMO.0912.WorkForceCS3.indd 18 8/30/12 1:22:30 PM
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20
Power Profile /September 2012
STEVE KENNY
Bank of America:
Of to the Races
Training for a marathon while working a
full-time job would be a challenge for anyone.
But working up to that 26.2-mile mark while
simultaneously doing your part to contribute to a
nationwide book of transactions that over the last
18 to 20 months included the origination of more
than $20 billion in commercial real estate loans
might pose its own set of challenges.
Steve Kenny, Bank of Americas commercial real
estate banking executive for New York and New
Jersey, is doing just that, though. And when he
takes to the starting line for the ING New York City
Marathon on November 4 to set out on a course
that will take him through all fve boroughs, the
challenges hell face will in many ways be business
as usual.
Mr. Kenny joined Bank of America in June 2000
from a legacy company, FleetBoston Financial, as a
client manager, and held this position for a decade.
Fleet was acquired by Bank of America on April 1,
2004, for approximately $47 billion in stock.
Then in May of 2010, there were some changes
within the commercial real estate banking group
here in New York, Mr. Kenny remembered over
breakfast recently. And there was an opportunity
for me to take over the leadership role and be the
market executive for real estate here in New York
and New Jersey.
At the time, the country had just experienced
three straight quarters of growth. Harvard
professor Jef Frankel had declared the end of the
recession on his blog following a March uptick
in employment reported by the Bureau of Labor
Statistics. Still, lending in commercial real estate
was on shaky ground, even in New York City.
In the reluctance of other lenders, Mr. Kenny
saw opportunity.
We were in a very deep recession in 08 and 09,
and there was clear indication of an emergence
from that and an opportunity to have the business
grow again, Mr. Kenny remembered, adding that
of upmost importance in orienting himself to his
new role was making sure the right employees,
mindset, clients and strategy were in place. Thats
taken time for us to align all of that, but I think we
had great success in 2011 because of having the
right people, having the right philosophy, having
the right clients. We have a lot of fantastic clients.
Growing the business has meant endeavoring
to augment the success of the banks construction
lending platform with more bridge and term debt
fnancing, thereby achieving a more balanced
portfolio. Mr. Kenny emphasized the importance
of this several times over the course of multiple
conversations, in fact. This is meant to happen
while the bank forges ahead with lending on deals
like Extell Developments 90-story, mixed-use
One57 project, for which Bank of America led the
syndicate on the $700 million construction loan.
It allows you to advance dollars more
quickly because construction money goes out
incrementally, Mr. Kenny explained. And
obviously were a for-proft-driven business and
enterprise, and we want to put our money to work
sooner rather than later.
Augmenting the construction lending platform,
however, means frst and foremost getting the
word out. Mr. Kenny said this is one of the top
prioritiesand also one of the easiest to achieve,
since hes in part dealing with a captive audience.
Our existing clients think of us the way that
weve projected and portrayed ourselves for a
period of time, and we need to make sure that they
understand what it is that were pursuing these
days, he said. Number two, we need to fnd new
clients. This is the largest real estate market in the
United States, and we have a signifcant number of
high-quality clients today, but there are other
by Carl Gaines

On the heels of highly publicized deals in the New York City
area, exec works to bring balance to the banks portfolio.
TMO.0912.CS3.Feature_EDIT?.indd 20 8/30/12 2:25:51 PM
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names out there or other clientswhat Ill call
prospects for usthat we can, should and will be
doing business with in the future.
Of all of the banks loans in the New York area,
Extell Developments One57 project has gotten by
far the most attention, initially because on paper it
didnt necessarily look so alluring. The headline
was Condo, Hotel, Construction and that was
not an easy headline to be selling into, Mr. Kenny
remembered. As we sit here today, the worlds
a little bit diferent. We did that transaction.
There have been a handful of other condominium
transactions that have completed, so the bank
market has warmed to condo construction, though
it's still somewhat restrictive.
Mr. Kenny said that One57 has been particularly
successful as a marquee transaction. For one thing,
it demonstrated Bank of Americas willingness at
the time to think outside of the box. He credits Brad
Dubeck and Dale Blumenthalclient manager and
underwriter, respectivelywith structuring the
deal. When the deal originally came in, it didnt
look like, and it wasnt being talked about in the same
light as, what we ultimately ended up structuring
and being able to sell into the marketplace, he said.
And then he gave credit as well to David Friedman
on the syndications team for explaining the
intricacies to the banks that would ultimately end
up participating in the syndicate.
Despite challenging headlines, though, Mr.
Kenny said, One57 was ultimately handled the
way that any transaction would have been. Asked
why it made sense, he didnt hesitate. First and
foremostand this is philosophically the way that
we always try to manage our business: sponsorship,
he said. We had existing relationships with both
the development and equity partner here in New
York and the equity partner overseas. Number two,
the amount of cash, equity, in the transaction was
extremely signifcant and, again, thats something
we look for as a pillar of how we want to do business.
The third is the business plan. Did the business
plan make sense? And so Hyatts involvement with
a new brand that they were bringing to New York,
their capital was committed to it and there was a
contractual obligation for them to purchase the
hotel upon completion.
An additional bonus to the One57 deal has
been the infux of other business, though Mr.
Kenny wouldnt be specifc about exactly what
deals have come to the bank as a direct result of
the project. Among these might be the funding of
a construction loan for a freestanding hotel that
Extell is reported to be putting up on 45th Street.
That transaction led to a very signifcant
increase in our relationship with the partners
involved, he said, and identifable, proftable
transactions that we were able to complete for
those clients. Then, I think it also positioned us
in the marketplace as, Wow, Bank of America is
willing to be creative, to be thoughtful and to try to
help clients achieve their goals.
Other recent deals include $90 million in
construction fnancing provided to TF Cornerstone
for a multifamily project at 45-60 Center Boulevard
in Long Island City, Queens, and a bevy of term loans
that show positive results for Bank of Americas
eforts at better balancing its portfoliothough
many are for properties and projects located
outside the New York tristate area. For example,
there was a $79 million, fve-year term loan on
residential properties at 9045, 9090, 9110 and 9120
Judicial Drive in San Diego, a $70 million term loan
to Building & Land Technology for its residential
property at 101 Park Place in Stamford, Conn., and

Power Profile /September 2012
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If youre not prepared,
youre not going to be
successfulwhether its
running a marathon or
running a business.

23
September 2012 / Power Profile
a $125 million term loan for a Monday Properties
ofce portfolio in the D.C. metro area.
The bank also recently provided an acquisition
loan for a Gramercy Park ofce and retail project
for Angelo Gordon & Co., Mr. Kenny said. Angelo
Gordon is also working with Bank of America
to potentially refnance the construction of its
condominium conversion at Carlton House at 680
Madison Avenue, along with Extell Development.
Adam Schwartz, managing director and head of
real estate at Angelo Gordon, said that the amount
of the refnancing hasnt yet been determined but
talks with Bank of America are underway.
I enjoy dealing with him, Mr. Schwartz said.
Hes a real straight-shooter and does what he says
hes going to do for you. He doesnt play games and
is just a good guy.
Another client, Jef Blau, president of the
Related Companies, applauded what Mr. Kenny
did as the market frst started to improve.
Bank of America has really been on the forefront
of real estate lending to the best customers since
the aftermath of the downturn, Mr. Blau said,
which I think was a very smart strategy to pick up
market share. He added that the bank has looked
at top-tier only for construction fnancing and has
been shrewd in picking and choosing whom to do
business with.
They are right now involved in virtually every
single construction fnancing that were doing,
Mr. Blau pointed out. He added that Bank of
America has been aggressive in booking new
business with Related since other banks pulled out
of the marketplace.
Its a volume of business that requires a great
deal of focus, not to mention the patience required
to efect some change in the makeup of the banks
lending platform.
The fact that he is shrewd, with an eye on the
bottom line, is perhaps a function of Mr. Kennys
background. He grew up in working-class housing
in Stuyvesant Town and said that he often runs
loops there as part of his marathon training. Later,
his parents dream of home ownership prompted a
move to Long Island. After his grandfather retired,
his grandparents made the move from Stuyvesant
Town to Long Island as well.
He has an accounting degree from the State
University of New York at Plattsburgh, but said
that he never applied the craft directly in an
accounting frm. Currently, he splits his time
between the family home in Vestal, N.Y., and a
Tudor City apartment.
Asked about role models in the business
mentors who had a particularly positive infuence
he instead credited his parents.
They had incredible work ethic and instilled
that in me, and I think that is the number one
thing that separates successful people from
less successful people, he said. What we do is
relatively straightforward. We make judgments on
people and their fnancial profles.
His parents also instilled in him the importance
of being preparedsomething likely to come in
handy November 4. If youre not prepared, youre
not going to be successfulwhether its running
a marathon or running a business, Mr. Kenny
cautioned. They always say, Enjoy the journey.
The journey is in large part about the preparation
to get to the point where you can be successful, so
I take a lot of pride in working hard and trying to
be enthusiastic about what I do. I have my days
just like anyone else where it seems harder than it
should be. But thats O.K., because the next day Im
back and Im energized and Im eager to go.
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CMBS /September 2012
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25
September 2012 / CMBS
CMBS: Keep Calm
and Carry On
Maturities loom, but experts say not to panic
by Carl Gaines

A
nyone who follows the CMBS market,
especially in relation to its contribution
toward funding the massive amount of
commercial real estate loans coming
due during the rest of 2012, knows that it can be a
topsy-turvy ride. But experts tell The Mortgage
Observer that despite the load of coming-due loans
and a CMBS market thats a fraction of where it was
pre-crash, theres no reason to panic. This, even
as delinquency rates for CMBS climb higher and
higher.
According to data from Trepp, initially there was
roughly $70 billion in CMBS set to mature in 2012.
As of the end of August, $38.6 billion of that was
still outstanding, though this fgure is somewhat
skewed by loans past their maturity dates but
not modifed, one analyst said. These loans will
likely meet difering ends, through extensions,
modifcations or liquidations. Just counting loans
that are current, $13.5 billion is due to mature in the
rest of the 2012.
Of note is the fact that several frms re-entered
the CMBS market in 2011among them Prudential,
through a joint venture with Perella Weinberg,
and KeyBank Real Estate Capital, which initially
had a table-funding arrangement with JPMorgan.
Prudential Mortgage Capital Company said in a
release at the time that the venture would provide
its borrowers with access to the commercial
mortgage-backed securities market without
creating a new CMBS warehouse.
Clay Sublett, a senior vice president at KeyBank
who is in charge of CMBS as well as life insurance
company placement and the FHA group, said his
frms initial table-funding arrangement allowed
for a degree of protection too.
That was to allow us to protect ourselves from
warehousing risk, Mr. Sublett explained. In
hindsight, it was a good move, because in July and
August of 2011, for a combination of factors, the
CMBS market went through a hiccup.
26
CMBS /September 2012

He referenced three factors
during this periodthe debt-
ceiling debate, Standard & Poors
downgrade of the U.S. credit rating
and the agencys withdrawal of its
rating on a $1.5 billion Goldman
Sachs and Citigroup pool of
CMBSas particularly pernicious.
This all created a perfect storm,
keeping the CMBS market tamped
down at a time when it was crucially
needed.
What resulted from that, Mr.
Sublett continued, was that CMBS
spreads widened roughly 100 basis
points. He cited the lack of hedging
products designed to protect
warehoused loans as one reason
the market isnt more improved.
Christopher Bushart, a senior
director at Fitch Ratings in the
structured fnance and commercial
mortgage division, echoes this
sentiment. A big diference with the
way that loans are originated now
compared to how it was prior to the bubble bursting
is that banksin just the assessment of riskthey
were much more comfortable warehousing, so you
would always have a supply of loans, Mr. Bushart
said. This was just a machine.
Fitch Ratings, for its part, predicted in early
August that the next 12 months would prove
challenging as far as CMBS maturities were
concerned. Fitch at the time saw $24 billion in deals
it rated set to come due during that time frame,
41 percent of which, under the rating agencys
defned stressed refnance parameters, will not be
refnanced. The problem child is that 2007 vintage
of loan, underwritten to some pro forma income.
What could be interesting is a loan on a property
that was 70 percent occupied, and they were saying
that it was going to get to 90 within 12 months,
and all of the numbers were based of of that, and
it didnt happen, said Jonathan Teichmann, a
director at Fitch Ratings in the structured fnance
and commercial mortgage division. Thats
probably not going to get refnanced, certainly not
without some new partner or infusion of
cash to pay down the existing debt.
Melissa Farrell, a managing director at
Prudential Mortgage Capital Company,
said that Prudential has looked at the
issue of looming maturities in the
CMBS market and loans coming up for
refnancing. Its somewhere around
$350 billion a year, give or take, she
said. If you look at that $350 billion,
where is the capital going to come from
to refnance that? Ms. Farrell estimated
that about $50 billion would come from
life companies, $50 billion from the
agencies, $100 billion from banks and
about $50 billion from CMBS.
It leaves you about a $100 billion gap,
she said. Options left include deleveraging
through recapitalizations, mezzanine
fnancing and equity write-downs. In
New York, a market unlike any other, this
is not so dire. You see that in New York
people coming in and putting fresh equity
into deals, Ms. Farrell said. And so we
feel its manageable. Theres money to fll
that gap, and its already being flled. I think overall
it will be fne. Its not so insurmountable.
The variety among markets is one reason
industry experts say that its best when considering
the outcome of loans coming due to take it on a
case-by-case basis.
You need to be careful not to oversimplify, said
Mr. Sublett, when asked about a potential gap in
capital available to refnance these loans. Its very
property-by-property, loan-by-loan specifc. Some
borrowers are well-capitalized, other borrowers are
In the CMBS industry, far

too often, the industry tends
to have a herd mentality.
Clay Sublet, senior vice president at KeyBank Real Estate Capital
27
September 2012 / CMBS
not well-capitalized, so it just depends
on the individual circumstances of the
loan in question.
Ms. Farrell said that loans that arent
secured by high-profle New York
ofce buildings might face pressure
in the future. I think its more
those tertiary, smaller conduit deals
that either are going to have to just
deleverage or write of the equity on,
she said. Those are the tougher ones
to refnancewhen you start getting
into those tertiary markets.
In addition to the market, the
asset type comes to bear as well, as
evidenced in investment research
frm Morningstars August 2012
Monthly CMBS Delinquency Report.
Morningstar added 445 loans in 203
CMBS transactions to its Watchlist,
a measure of loan and property level
credit risk, during the month of July. Of
these, about 36 percentor $1.9 billion
across 116 loansrepresented additions by unpaid
balance in the retail sector. Ofce accounted for
roughly 28 percentor $1.5 billion across 87 loans.
These new additions to Morningstars Watchlist,
however, didnt necessarily refect the property
types that experts told The Mortgage Observer are
most troubled.
Compared to historical numbers, were still at
pretty high delinquency rates across all the property
sectors, said Mr. Bushart. But retail, I guess you
could argue thats performing most strongly.
As we close out the rest of 2012, predictions
for CMBS issuance for the year vary. Following
its table-funding arrangement, KeyBank has
contributed collateral to one securitization as an
originator already, Mr. Sublett said. He predicted
that over the next 60 days, two more securitizations
would followwith its UBS 2012-C3 scheduled to
price in mid-September and a contribution toward
a Deutsche securitization in the wings as well.
Mr. Sublett agreed with the generally accepted
prediction of a $35 billion to $40 billion year-
end result.
Most of my colleagues in the
industry would certainly like to see
CMBS larger thanlets just pick
a number$40 billion, he said.
But my argument is that it is still
signifcant.
Mr. Teichmann at Fitch Ratings
agreed, saying that the number hes
hearing is $35 billion as well. In
terms of the deal fow that were
seeing, there hasnt been any pause
or slowdown, he said. And youre
seeing not only a steady volume of
transactions, but the balances on
the transactions are increasing as
well. Those two elements should
lead to surpassing where it was that
we were last year.
Asked about headwinds facing
CMBS, Mr. Sublett again referenced
the importance of protecting the
value of loans held in the warehouse
and compressing the time that they are held.
Another headwind mentioned, though, came from
within.
In the CMBS industry, far too often, the industry
tends to have a herd mentality, he said. One of the
things that we struggle with is, Do we repeat the sins
of the last cycle, and do we damage the credibility
that we are rebuilding with investors, including
B-piece buyers and investment-grade buyers? What
you want to do is make sure that you are rebuilding
the credibility slowly and carefully.
Theres money to fll that gap, and its already

being flled. I think overall it will be fne.
Its not so insurmountable.
Melissa Farrell, managing director at Prudential Mortgage Capital
28
Culture /September 2012
Work Wear
We got to thinking about the differences between the
characters that we cover. First of all, a word of apology. Not
everyone who works in commercial real estate fnance is a man, with
a generous amount of stubble on his legs. But were curious about the
diferences between the creatures that inhabit this world, and so this
month: our sartorial musings for bankers, brokers and borrowers. And a few
suggestions for where you might shop for looks. Dressing is just one way to
tell the diference between the three, but it's where well start.
The Bankers: Michael Andrews Bespoke. 2 Great Jones Alley or
www.michaelandrewsbespoke.com.
The Brokers: J.Crew. Multiple locations throughout the city, including 10
Columbus Circle, 30 Rockefeller Center, 347 Madison Avenue and 91 Fifth
Avenue. Shop online at jcrew.com.
The Borrowers: Mens Warehouse. Numerous locations in the New York City
area, including 350 Fifth Avenue, 380 Madison Avenue, 650 Sixth Avenue and 115
Broadway. Shop online at menswarehouse.com.
Summer Read Retrospective
Joseph Orefice, senior vice president,
Investors Bank: Adam Smiths The Wealth
of Nations. Im not sure how I picked it
(maybe some deep-seated guilt from
skipping it in college). Anyway, I liked the
historical perspective of the times. I was
amazed at how the economic and psycho-
logical views from the American Revolution
are so relevant today.
Mat Galligan, executive vice president and
group head, CIT Real Estate Finance: Hank
Haneys The Big Miss: My Years Coaching
Tiger Woods. Kind of a tell-all on the great-
ness and decline of Tiger Woods, by his coach
and nationally recognized teacher. Also, I will
read next Anglo Republic: Inside the Bank
That Broke Ireland. A couple of us were inter-
viewed, but I was not quoted.
Spencer Garfeld, managing director at
Hudson Realty Capital: Marcus Lutrell and
Patrick Robinsons Lone Survivor. This was a
quick read, but a very compelling story about
Marcus Lutrell and, specifcally, Operation
Redwing, which took place in Afghanistan.
TMO.0912.CS3.CULTURE.indd 28 8/30/12 3:02:15 PM
lrlday: 7 M: WLlW 21
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Debut|ng: September 21, 2012
7 M WLIW 21
Untitled-15 1 8/29/12 10:12:10 AM
30
The Sked /September 2012
The Sked: September
5
Fit the gym into your busy schedule by visiting the
New York Athletic Club for an after-work seminar
hosted by the CRE Finance Council.
CMBS Special Servicer Workouts Legacy Vs. New
Issue; New York Athletic Club, 180 Central Park South,
New York, N.Y., 5:30pm to 8pm on September 5. Call
or email Alex Ong at (202) 448-0850 or aong@crefc.
org, or visit www.crefc.org/events.aspx?id=20666 for
more information.
9-11
If your summer ended too soon, take an extended
weekend trip to Dallas for the Mortgage Bankers
Associations Risk Management and Quality
Assurance Forum. Though you might need to
chat about new demands on your QC process, risk
analytics and underwriting: tickets are about $1,000
apiece.
The Mortgage Bankers Associations Risk
Management and Quality Assurance Forum; Omni
Dallas Hotel, Dallas, Texas, September 9-11. Call (800)
793-6222, option 3 or visit www.mortgagebankers.org/
RMQA12.htm for more information.
11-14
If you dont like shopping on
Fifth Avenue or in Soho, brush up
on your Mandarin and head over
to Shanghai for some retail
therapy at the Retail Real
Estate World Summit.
ICSC Retail Real
Estate World Summit:
The Globalization of Retail;
Shanghai International Convention Center,
2727 Riverside Avenue, Shanghai, China;
September 11-14. Call or email Jorge Lizan at (646)
728-3927 or jlizan@icsc.org for more information.
12
Dont let the all-day seminars turn you o to this
event. Just be sure to pop in for the three networking
breaks at 11:15am, 1:10pm and 4:15pm.
The Real Estate CFO Forum; The Union League
Club, 38 East 37th Street, New York, N.Y.; 7:15am to
7:45pm on September 12. Visit www.imn.org for more
information, or call (212) 224-3428 to register.
17
Sometimes it isnt common sense that the best
retail places are the most accessible.
NYC Transit Oriented Retail Development; CBRE,
200 Park Avenue, Town Hall, 21st oor, New York,
N.Y.; 6:30pm to 8:30pm on September 17. Visit uli.org
for more information.
19-21
Discounts are given for group registrations, so
grab a few real estate nance friends and jet o to
Miami for a few days.
Crittenden Real Estate Finance Conference;
Miami, Fla. September 19-21. Call (800) 211-1697 or
visit www.crittendenrealestatenance.com for more
information.
24
For those who like under-the-table transactions,
be sure to check out the privately funded lenders
seminar to ensure that you are fully taking advantage
of all benets and possible strategies.
Privately Funded Lenders: Strategies and Benets;
O ces of Paul Hastings LLP, 75 East 55th Street, New
York, N.Y.; 5:30pm to 7:00pm on September 24. Call or
email Alex Ong at (202) 448-0850 or aong@crefc.org
for more information.
24-25
Thankfully the Canadian-American Commercial
Real Estate Conference is on the American side of
the border, so you dont have to stress about whether
you renewed your passport or remembered your
drivers license.
Canadian-American Commercial Real Estate
Conference Marketing and Education; Quality Hotel
& Suites at the Falls, 240 First Street, Niagara Falls;
September 24-25. Email Sherry at sherry@nycap.
rr.com for more information.
30
Be sure to listen to all of the chatter about the
year-old Consumer Financial Protection Bureau to
decide whether or not it is time for a career change!
MBAs Regulatory Compliance Conference 2012;
Grand Hyatt Washington, Washington, D.C.; September
30 to October 2. Visit events.mortgagebankers.com for
more information.
Fit the gym into your busy schedule by visiting the
New York Athletic Club for an after-work seminar
Conference Marketing and Education; Quality Hotel
& Suites at the Falls, 240 First Street,
September 24-25. Email Sherry at sherry@nycap.
TMO.0912.CS3.TheSked.indd 30 8/30/12 12:32:51 PM
Untitled-17 1 8/29/12 10:43:05 AM
32
Of Interest /September 2012
1 Times Square 5
101 Park Place (Stamford) 22
1100LincolnRoad(MiamiBeach) 8
142 North 6th Street 6-8
202 Scott Road (Willimantic) 10
325 Hudson Street 5
4 World Financial Center 6
444 Park Avenue South 6
45-60 Center Boulevard (Long
Island City) 22
525 Washington Boulevard
(Jersey City) 4
530 Fifth Avenue 5
590 Fifth Avenue 6
601 Lexington Avenue 4
680 Madison Avenue 8, 23
9045Judicial Drive(SanDiego) 22
A
Abod, Cary 4
Actovia 14
Angelo, Gordon & Co 8, 23
Anglo Irish Bank 8
Anthropologie 8
Appel, Aaron 6-8
Apple Bank 14
Astoria Federal Savings Bank 14
Astoria Federal Savings and Loan
Association 11
Astoria Financial 11
AT&T 6
Aurora Capital Associates 8
AXA Equitable 4
B
Bank of America 6, 8, 20-3
Barclays Bank 18
Bath (Great Britain) 10
Beech Street Capital 11
Bentall Kennedy 4
Bergman, Abe 18
Berman, Michael 5
Besen, Michael 18
Besen Group 18
Betesh, Morris 8
Bethesda, MD 5
The Big Miss: My Years
Coaching Tiger Woods 28
Blackstone 4
Blackstone Real Estate
Partners VII 4
Blau, Jef 23
Blumenthal, Dave 22
BNP Paribas 4
Bristol Group 5
Brookfeld Ofce Properties 4, 6
Building & Land Technology 22
Bureau of Labor Statistics 20
Burger, Alec 4
Bushart, Christopher 26-7
C
California Public Employees
Retirement System (CalPERS) 4
Cama, Domenick 11
Canadian-American Commercial
Real Estate Conference 30
Cantor Commercial Real Estate 11
Cantor Fitzgerald 17
Capital One 5, 14
Carlton House 8, 23
Carpenter, James 11
Chandan, Sam 17
Chelsea Market 5
China 6
CIT Real Estate Finance 28
Citigroup 26
Citadel Group 4
Clancy, Manus 10
CMBS 10, 11, 12, 17, 25-7
Cohen, Frank 4
Colacino, Michael 18
Costa, John 11
CRE Finance Council 30
Crittenden Real Estate Finance
Conference 30
Cushman & Wakefeld 6
CWCapital 4-5
CW Financial Services 5
D
Dallas, TX 30
Deutsche Bank 6, 11, 17
Dexus Property Group 4
Didio, Tom 4
Dime Savings Bank of
Williamsburgh 14
Dobrowsky, Andre 5
Dubeck, Brad 22
E
Eastern Consolidated 12
Eastern Union Commercial 18
EB-5 6
Edelman, Mike 11
Empire State College 5
Englund, Jef 10
Estes, Chris 18
Extell Development 8, 20-2, 23
F
Farrell, Melissa 26-7
Feil Organization 6
Fitch Ratings 26-7
FleetBoston Financial 20
Flushing Savings Bank 14
Frankel, Jef 20
Freddie Mac 10, 11
Freddie Mac Targeted Afordable
Housing Mortgage Program 10
Friedman, David 22
Frydman, Jacob 18
G
Galligan, Matt 28
Garcia, Paulo 11
Garfeld, Spencer 28
GE Capital Real Estate (GECRE) 4
Gluck, Jake 18
Goldman Sachs 11, 25
Gramercy Park 8, 23
Greystone Servicing Corp 10
H
Haney, Hank 28
Harrington, John 12
Harvard University 20
Helios Capital Advisors 18
Helmsley, Leona 8
Hermance, Ronald, Jr 10
Hernandez, Alex 6
HFF 4
HKS Capital Partners 6, 12
Horn, Jonathan 18
Hudson City Bancorp 10
Hudson Realty Capital 28
Hyatt 22
I
ING New York City Marathon 20
Investors Bank 11, 14, 28
J
Jamestown Properties 5
Jardin 6-8
Jersey City, NJ 4
JPMorgan Chase 11, 14, 25
K
Kapahi, Ayush 6, 12
Karson, Dave 6
Kenny, Steve 20-3
Kerin, John 18
Keybank Real Estate Capital 25-7
Knakal, Robert 11
Kohn, Steve 6
Kunofsky, Glen 18
L
Ladder Capital 11
Learner, Heidi 18
Level 3 Communications 5
Lincoln Road (Miami Beach) 8
London (Great Britain) 10
Lone Survivor 28
Luttrell, Marcus 28
M
Manhattan West 6
Marcus & Millichap Real Estate
Investment Services 18
Massey Knakal Capital Services 8,
11, 12
MEAG New York Corp 18
Mercantil Commercebank 11
Meridian Capital Group 6-8
Merrill Lynch 6
Miami, FL 30
Miami Beach, FL 8
Moin Development Group 6
Monday Properties 23
Morningstart 27
Mortgage Bankers
Assocation 11, 30
M&T Bank 10, 14
Multi-Employer Property Trust 4
Munich Re 18
N
National Housing Conference 18
Nazarian, Sam 6
NBA Store 6
Newport Tower 4
New York Athletic Club 30
New York Community Bank 11, 14
Niagara Falls, NY 30
North Carolina
Housing Coalition 18
NYC Transit Oriented Retail
Development 30
O
One57 20-2
Orefce, Joseph 28
Orndahl, Thor 10
P
Pelet, Kate 6
Pendergist, Jason 11
Penn Station 6
Peoples United Bank 11
Perella Weinberg 25
Pergolis, Richard 12
Pergolis Swartz Associates 12
Pilchick, Avi 18
Principal Real Estate
Investors 4-5
Provident Bank 11
Prudential Mortgage Capital Co 4,
10, 25-6
R
Read Properties Inc 6
Real Capital Analytics 6
Regal Cinemas 8
REIT 8, 17
Real Estate CFO Forum 30
Related Companies 23
Retail Real Estate
World Summit 30
Robinson, Patrick 28
Rockefeller Center 6
Rockwood Real Estate Advisors 5
S
Saks Fifth Avenue 6
Salomon Brothers 18
San Diego, CA 22
Schwartz, Adam 8, 23
Schwartz, Jonathan 6
Shanghai, China 30
Shenfeld, David 6
Shimanowitz, Dov 18
Signature Bank 11, 14
Sitt, Joseph 6
Smith, Adam 28
Sonnenblick Goldman 12
Sovereign Bank 6, 14
Spreitzer, John 6
Stacks, Ben 5
Stamford, CT 22
Standard & Poor 26
Standiford, Marty 4
State Street Corp 18
State University of
New York at Plattsburgh 23
Stein, Joshua 16
Steiner Equities 6
Stoler, Michael 11
Studley 18
Stuyvesant Town 23
Sublett, Clay 25-7
Swartz, Jerry 12
T
Teichmann, Jonathan 26-7
Tepedino, Mike 4
TF Cornerstone 22
Thelander, Garrett 8
Thor Equities 6
Trehubenko, Todd 4-5
Trepp 10, 25
Tudor City (Manhattan) 23
Tufariello, Joseph 8
U
United Realty Advisors LP 18
United Realty Partners 18
US Department of Housing and
Urban Development 18
V
Vaughn, Michael 18
Verizon 5
Vesta Corporation 10
Vestal, NY 23
Vornado Capital Partners 8
Vornado Realty Trust 8
W
Walker & Dunlop 5, 18
Wall Street Journal 6
Warner, Michelle 18
Washington, DC 23, 30
The Wealth of Nations 28
Wells Fargo 8, 14
Wilcox, Whit 4
Williamsburg, Brooklyn 6, 14
Willimantic, CT 10
Wilmers, Robert 10
Wilmington Trust 10
Windham Heights 10
Woods, Tiger 28
Woodwell, Jamie 11
Y
Young Woo & Associates 5
Z
Zlotowitz, Ira 18
An index of all the people, places, addresses and companies mentioned in this issue
06 08 06 06 06
TMO.0912.OfInterest.indd 32 8/30/12 3:26:14 PM
The Mortgage Observer
For advertising information please contact
Barbara Ginsburg Shapiro, Associate Publisher
at 2124079383 or bshapiro@observer.com
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The Mortgage Observer is a
glossy magazine inserted into
the last issue, each month of
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The Insiders Guide to New Yorks Commercial Real Estate Industry
It is the denitive resource for the Commercial Real Estate Industry
2013
2012
Untitled-5 1 8/28/12 11:39:58 AM

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The Insiders Monthly Guide to New Yorks Commercial Mortgage Industry September 2012

TMO.0912.CS3.Feature_EDIT?.indd 22 8/30/12 2:27:09 PM

In the CMBS industry, far

Theres money to fll that gap, and its already

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