It’s often argued that commercial real estate is the next big disaster looming for America. Property held by banks and other firms is still inflated on the books but the cracks are beginning to show.
That’s why Barry Sternlicht’s hedge fund, Starwood Capital, is revving into high gear, preparing to purchase one of Greenwich’s finest downtown buildings at a rock bottom price if all goes according to plan. Teri Buhl explains the appeal of this building:
The building once housed two hedge funds: Plainfield Asset Management and Duff Capital; both have run into serious financial trouble due to the financial crisis. Unable to pay their rents, their predicaments have placed 100 West Putnam’s property manager, Antares, a few missed mortgage payments away from possibly losing control of the building to Starwood Capital. (The company is unrelated to Starwood Hotels.)
So, if Antares can’t come up with more capital…
According to people involved in the deal, Starwood Capital purchased the $30 million mezzanine loan and certain rights on the rest of the debt on the building, in a play to seize control of it…
If Antares misses a payment on the primary debt, the mezzanine debt holder can step in, make the payment, and seize control of the property.
Basically, all that stands in line between Starwood and Antares is one mortgage payment. If Antares misses it, Starwood can score 100 West Putnam for a fire sale price and own the hottest, most beautiful building in town.
We hear it’s even better than Paul Tudor Jones’ Greenwich office.
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