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This is a good news story for once.  But, of course, since the father of this soupcon of good news is our government, it’s almost unintended.

From the ashes of the economic recession of 2008 came the rebirth of the Immigration Investor Program, more commonly known as “EB-5 Visa Program.”  This bit of social engineering has been around since the program was first introduced back in 1990 but got a second wind when everything else went to Hell.  The purpose behind the program was to benefit the United States economy by attracting investments from qualified foreign nationals.
Continue Reading The EB-5 Visa Program: the Rebirth of the Immigration Investor Program

My New Year began this past Monday morning with the following email from a client (a Giants fan): "Now that football season is over it’s time to get back to work". Not quite right for those of us here in New England, but I agree overall with the sentiment (albeit, with this year’s blizzard of year-end deals, not all of us were ever too far removed). Amid last week’s understandably slow news cycle appeared a story in Bloomberg on the growing desire in the private equity sphere for CRE mezz debt. Indeed, the stars seem to be aligning in a way that could mark 2011 as the beginning of a bull market for CRE mezz investors.
 Continue Reading Happy 2011 for Mezzanine Lenders?

Two weeks ago, As the World Turns – a CBS soap opera documenting the lives of the inhabitants of the fictional town of Oakdale, Illinois – ended a 54 year run on daytime television. A shorter-tenured, but nonetheless compelling, local epic aired this week as Boston Properties announced that it had emerged from a bidding war to secure the Bay Colony Corporate Center – perhaps the premier office campus in New England – for a price of approximately $185 million (inclusive of assumed debt). As a real estate finance attorney in Boston, it’s a property I have fielded a lot of calls about. And, although missing the ubiquitous case of amnesia, it’s a story that would have made the good people of Oakdale proud.

The story of Bay Colony, corporate center, begins with its construction (on the former site of a pig farm along the Cambridge reservoir) at the height of the tech bubble. Located along Boston’s Route 128 tech corridor, the site comprises almost a million square feet of space on 58 acres, with 3,000 parking spaces to accommodate a rent roll that has listed a who’s who of Hub-area tech, venture capital and telecomm tenants. In fact, the sheer number of resident venture firms over the years – Advanced Technology Ventures, Charles River Ventures, Cedar Fund, Ironside Ventures, JAFCO Ventures, Longworth Venture Partners, Matrix Partners, Northbridge Venture Partners and Polaris Ventures Partners, to name a few – contributed to the property’s legendary status among entrepreneurs looking for investment dollars. A single workday onsite could yield three pitches.Continue Reading Distressed Debt: Boston Properties Next Up At Bay Colony

Last week, the Supreme Court of the State of New York handed down a decision in the battle between CWCapital, representing the senior mortgage debt as special servicer, and Pershing’s andWinthrop’s joint venture, who recently bought the mezz debt in this transaction at a deep discount.  Everyone knows what’s going on here.  The mezz debt was bought as a lever to attempt to get control of the property through, or in the shadow of, bankruptcy.  A successful workout would, by definition, compromise the senior debt.  To prevent that, CW sought injunctive relief to prevent the foreclosure of the mezz debt and they got it.  Unless this is reversed, it’s game over for the mezz because the foreclosure of the mortgage debt is coming up very soon. Continue Reading The Stuy Town Wars

According to the Boston Globe, the owners of Boston’s signature office building – the John Hancock Tower – have begun marketing a significant stake in the building.  Many will remember that the Hancock Tower represented one of the Great Recession’s first large-scale mezzanine foreclosures, falling in late 2008/early 2009 when a joint venture comprised of Normandy Real Estate and Five Mile Capital acquired the building via mezzanine foreclosure.  As other industry players were “extending and pretending”, the team from Normandy/Five Mile did their homework, called the borrower’s bluff and bought themselves a building.  And now it looks like it may be paying off.

By accurately predicting the building’s value and strategically purchasing mezzanine debt at the rights levels, the joint venture was able to seize control of the mezzanine stack and force foreclosure.  The master stroke – using mezzanine controlling holder rights to de-lever a bloated (and hugely complicated) mezzanine capital stack, while keeping attractively low-priced mortgage debt in place – serves as a brilliant example of sophisticated distressed-debt investing in CMBS structures and a primer on how to fight and win “Tranche Warfare”.
 Continue Reading The Hancock Tower: A Distressed Debt Success Story?

The Wall Street Journal and Bloomberg, among other outlets, reported last week that the Royal Bank of Scotland Group Plc is in the process of placing a multi-borrower securitization – the first such issuance to come to market since June 2008. Of course, RBS is facing several hurdles as it trailblazes once-familiar territory. The offering, variously reported to be between $300 and $500 million, would represent a significant tool for other banks in determining pricing for future multi-borrower deals. The offering will also serve as a measuring stick for investor demand in the post-TALF world.Continue Reading First Securitization Since 2008: No April Fooling