NorthStar/RXR New York Metro Real Estate Invests in Loan for NYC Condo Development
August 9, 2017 | James Sprow | Blue Vault
NorthStar/RXR New York Metro Real Estate Inc., a publicly registered nontraded real estate investment trust sponsored by Colony NorthStar (NYSE: CLNS) and RXR Realty, completed the origination of a $12 million pari passu interest in a $20 million mezzanine loan, according to a August 7, 2017 8-K filing with the Securities and Exchange Commission.
The loan is secured by a pledge of an ownership interest in 11-19 Jane Street, a condominium development project located in the West Village of New York City. The property is owned by an affiliate of New York City-based developer Edward J. Minskoff Equities Inc. The borrower’s business plan is to develop the property into a luxury condominium property containing approximately 31,000 sellable square feet comprised of seven residential units and six parking spaces.
NorthStar/RXR completed the Investment through a partnership with an affiliate of RXR Real Estate Value Added Fund – Fund III LP, an institutional private equity real estate fund sponsored by RXR Realty LLC, NorthStar/RXR’s co-sponsor and affiliate of its sub-advisor. NorthStar/RXR and Fund III invested $12.0 million and $8.0 million, respectively, into the partnership, which in turn indirectly owns the loan.
The loan bears interest at a floating rate of 9.50 percent over the one-month LIBOR, with a LIBOR ceiling of 1.5 percent. It has a 1 percent origination fee and an initial term of three years with two one-year extension options. The loan-to-cost ratio is approximately 83 percent. The LTC Ratio is the aggregate amount loaned to the borrower over the estimated current cost of the project.
NorthStar/RXR funded the investment with proceeds from its ongoing initial public offering.
NorthStar/RXR New York Metro Real Estate focuses on investing in commercial real estate concentrated in the New York metropolitan area, primarily office, mixed-use, and to a lesser extent, multifamily properties. The offering was declared effective in February 2015 and has raised $29.4 million in investor equity, as of August 4, 2017.
Learn more about Colony NorthStar on Blue Vault’s Sponsor Focus Page.
