Newmark Arranges $535.8 Million Acquisition and Redevelopment Financing for US' Largest Ever Office-to-Residential Conversion

Rhea-AI Summary

Newmark has arranged a $535.8 million loan for GFP Real Estate, Metro Loft Management, and Rockwood Capital for the acquisition and redevelopment of 25 Water Street in New York City. This project is noted as the largest office-to-residential conversion in the U.S., transforming a 1.1 million-square-foot office building into approximately 1,300 residential units. The redevelopment will offer extensive amenities including fitness and lifestyle features. GFP and Metro Loft aim to leverage their extensive track records in similar projects to ensure success in this massive undertaking.

Positive

• Transaction represents the largest office-to-residential conversion in the U.S.
• Expected transformation of 25 Water Street into approximately 1,300 residential units.
• Strong sponsorship team with proven experience in redevelopment and conversions.

Negative

• None.

NEW YORK, Dec. 22, 2022 /PRNewswire/ -- Newmark has arranged a $535.8 million loan on behalf of GFP Real Estate ("GFP"), Metro Loft Management and Rockwood Capital for the acquisition and redevelopment of 25 Water Street. 25 Water Street is a 22-story, 1.1 million-square-foot office building in New York City's historic Financial District. The Newmark team was led by Vice-Chairmen and Co-Heads of the Debt & Structured Finance team Dustin Stolly and Jordan Roeschlaub and Senior Managing Director Chris Kramer. MSD and Apollo provided the loan. This transaction represents the largest ever office-to-residential conversion in the United States.ⁱ

Upon redevelopment, the property will be refitted to feature approximately 1,300 residential units ranging from studios to four-bedrooms. The property's 12'4" slab-to-slab ceiling heights and expansive 40,330-square-foot floor plates provide an attractive canvas for residential conversion. The property will also provide residents with an unmatched amenity package relative to other rental buildings in lower Manhattan. Fitness amenities are expected to include a basketball court, a steam room/sauna, indoor and outdoor pools and sports simulators. Lifestyle amenities are expected to include an expansive sky lounge and landscaped outdoor rooftop terrace and multiple entertainment and coworking spaces.

The residential conversion of 25 Water Street will be executed by a world-class sponsorship team led by GFP in collaboration with Metro Loft Management. GFP has recently acquired and redeveloped 13 properties comprising $2.2 billion invested into 3.9 million square feet and recently completed a $550 million renovation of David Geffen Hall at Lincoln Center for the Performing Arts. Metro Loft Management has a market-leading track record of conversions in lower Manhattan, including over five million square feet over the past 20 years.

Built in 1969, 25 Water Street enjoys uninterrupted light and air on three sides, offering broad views of lower Manhattan and New York Harbor from all floors. The property is situated on a double-wide street corridor with the widest exposure fronting Water Street protected by the property's own broad plaza, the low-rise Fraunces Tavern historic district and Coenties Slip park directly across Water Street. The property is also surrounded by two acres of broad plazas and public parks. Several modes of transportation, including over a dozen nearby subway lines, provide convenient access to the property.

Lower Manhattan has transformed into a true 24/7 neighborhood. The 2020 census revealed a residential population that is 33% higher than in 2010 and a massive four-fold increase from 2000. It is now the fastest-growing neighborhood in Manhattan.

About GFP Real Estate
GFP Real Estate is a vertically integrated owner, operator, property manager and developer of commercial real estate in the New York Tri-State Region. GFP owns over 55 buildings with more than 13.8 million square feet including some of New York City's most iconic real estate assets, including the Flatiron Building (175 Fifth Avenue), The Film Center Building (630 Ninth Avenue), 515 Madison Avenue, 1560 Broadway, the New York Market Center at 230 Fifth Avenue and 40 Worth Street. In addition to managing and leasing its own properties, GFP also provides management and leasing services to third-party building owners, representing additional buildings that cover more than 4 million square feet.

About Metro Loft Management
Metro Loft Management, LLC is a vertically integrated real estate development and management company founded in 1997. Metro Loft is a pioneer in residential conversions. Over the past 20 years, Metro Loft has earned a reputation as a leading conversion developer with more than 5 million square feet of results. Metro Loft has developed some of the most notable condominium and rental buildings in Lower Manhattan, including 443 Greenwich Street, 20 Broad Street, 180 Water Street, 20 Exchange Place and 63 Wall Street among many others.

About Rockwood Capital
Rockwood Capital is a real estate investment management firm founded in 1995 that provides debt and equity capital combined with real estate operating expertise for the repositioning, development, redevelopment and recapitalization of residential, office, retail and hotel space in key markets throughout the United States. 

Rockwood is a more than 85-person organization with offices in New York, NY, San Francisco, CA, and Los Angeles, CA. Since inception, Rockwood and its principals have invested in approximately $38.6 billion of real estate and real estate-related assets (gross asset value). As of Q3 2022, Rockwood manages a portfolio of approximately $13.2 billion (gross asset value). Rockwood's international investor base includes sovereign wealth funds, public and private pension funds, endowments, foundations, insurance companies, funds of funds, high net worth individuals and family offices. For more information, visit www.rockwoodcap.com

About Newmark
Newmark Group, Inc. (Nasdaq: NMRK), together with its subsidiaries ("Newmark"), is a world leader in commercial real estate, seamlessly powering every phase of the property life cycle. Newmark's comprehensive suite of services and products is uniquely tailored to each client, from owners to occupiers, investors to founders, and startups to blue-chip companies. Combining the platform's global reach with market intelligence in both established and emerging property markets, Newmark provides superior service to clients across the industry spectrum. Newmark generated revenues of approximately $3.1 billion for the twelve months ending September 30, 2022. Newmark's company-owned offices, together with its business partners, operate from approximately 180 offices with nearly 6,700 professionals around the world. To learn more, visit nmrk.com or follow @newmark.

Discussion of Forward-Looking Statements about Newmark
Statements in this document regarding Newmark that are not historical facts are "forward-looking statements" that involve risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements. These include statements about the effects of the COVID-19 pandemic on the Company's business, results, financial position, liquidity and outlook, which may constitute forward-looking statements and are subject to the risk that the actual impact may differ, possibly materially, from what is currently expected. Except as required by law, Newmark undertakes no obligation to update any forward-looking statements. For a discussion of additional risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see Newmark's Securities and Exchange Commission filings, including, but not limited to, the risk factors and Special Note on Forward-Looking Information set forth in these filings and any updates to such risk factors and Special Note on Forward-Looking Information contained in subsequent reports on Form 10-K, Form 10-Q or Form 8-K.

__________________________________

iAccording to a comparison of Real Capital Analytics data based on loan value

 

View original content to download multimedia:https://www.prnewswire.com/news-releases/newmark-arranges-535-8-million-acquisition-and-redevelopment-financing-for-us-largest-ever-office-to-residential-conversion-301709191.html

SOURCE Newmark Group, Inc.

FAQ

What was the value of the loan arranged by Newmark for the 25 Water Street project?

The loan arranged by Newmark for the 25 Water Street project was valued at $535.8 million.

What is the significance of the 25 Water Street redevelopment by GFP?

The redevelopment of 25 Water Street is significant as it represents the largest office-to-residential conversion in the United States.

How many residential units will 25 Water Street provide after redevelopment?

After redevelopment, 25 Water Street will provide approximately 1,300 residential units.

Who are the main parties involved in the financing of 25 Water Street?

The main parties involved in the financing of 25 Water Street are GFP Real Estate, Metro Loft Management, Rockwood Capital, along with Newmark.

What amenities can residents expect at 25 Water Street after its conversion?

Residents can expect amenities including fitness facilities, a basketball court, indoor and outdoor pools, a sky lounge, landscaped rooftop terrace, and coworking spaces.