Rosenberg & Estis seals $ 1.5 billion loan to New York amid pandemic
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Law360 (June 4, 2021, 9:17 p.m. EDT) – With emails circulating, Rosenberg & Estis attorneys have looked into a virtual environment to help the Durst organization land a $ 1.5 billion refinancing plan for several Manhattan Trophy properties, as the company raced through an evolving market to try to close the commercial mortgage-backed securities portion of the deal.
“You had to improve your communication,” said Eric Orenstein, partner of Rosenberg & Estis PC, of connecting with colleagues and parties across the table.
“It’s always logistics. Signature pages. Where is the person signing? Documents need to be notarized,” he said.
In January, the Durst Organization hired Rosenberg & Estis to structure a package including the refinancing of 1133 Avenue of the Americas and 114 W. 47th St., and the law firm over the next few months helped seal the agreement, which reached the New York public archives. last month. Given the COVID-19 pandemic, parties involved have faced considerable time pressure to secure the deal while figuring out how to remotely assemble the various complex financings.
The $ 1.5 billion deal was formed in two parts. For the most part, Durst secured $ 1.1 billion in CMBS refinancing from Bank of America, Citibank and Wells Fargo for 1133 Avenue of the Americas and 114 W. 47th St. For the second part, the company refinanced a $ 1 billion loan that a group of Citibank-led lenders had provided, and with the refinancing and restructuring converted that earlier loan into a new $ 400 million loan tied to other Durst buildings in Manhattan.
But these agreements, which were recently concluded, had been in the works for months. When Durst first realized it was a good time to seek refinance, the company had to figure out which lenders it would use and what the package would look like.
Rob Rosenberg, chief executive of Wells Fargo, told Law360 that the biggest impact of the pandemic on the Durst deal came early, as Wells Fargo sought to get some of it. Rosenberg, who focuses on large home loans – deals typically over $ 100 million – led the deal for Wells Fargo.
“When you come up with a deal and try to win the deal, there’s nothing better than face-to-face contact. I want to be in Durst’s office, shake hands with senior decision-makers and watch them in the eyes to let them know we’ll keep our promise, ”Rosenberg said.
“Negotiating to win this business during the pandemic was a little different since we couldn’t be face to face,” he added.
Representatives from Bank of America and Citi could not immediately be reached for comment.
As the process unfolded, the question also arose as to how investors would view the deal given the uncertainty in the office market as many properties were left partially or largely empty with employees. still working from home amid the pandemic.
“We were running against time to do it and hoped the market didn’t move,” Orenstein said of the price market. “These are kind of the things you always run.… Obviously in a pandemic it changes the mindset a bit.”
“We were trying to follow and try to figure out where the market is going. The unknown that’s still there was a bigger unknown. You just have to be positive,” Orenstein added.
And on the Wells Fargo side, Rosenberg also perceived a sense of urgency on the part of the borrower.
“Durst was very keen to shut down funding quickly. At the onset of the pandemic, capital markets were volatile. No one had a crystal ball as to how badly the pandemic would get,” Rosenberg said. “There was definitely a motivating desire for Durst and the three lenders to work together to close quickly and efficiently.”
Banks turned to Cadwalader Wickersham & Taft LLP for help with both fund creation and securitization, while Blank Rome LLP assisted Citibank on some aspects of loan restructuring. Lawyers for Cadwalader and Blank Rome who worked on the case told Law360 they were unable to comment.
Orenstein is no stranger to either of the two buildings tied to the $ 1.1 billion portion of the financing, having made earlier deals on both properties. 1133 Avenue of the Americas is approximately 1.1 million square feet while 114 W. 47th St. is approximately 650,000 square feet.
Durst could not immediately be reached for comment.
Orenstein said the latest deal was an example of strong investor support for high-quality office buildings in New York City and showed that one sector of the office market has great potential, despite what some are saying about the impact of the pandemic.
“What that says about the market is that the market is extremely resilient.… It shows tremendous recognition that the market is going to be here. Investors in these stocks are feeling that too,” Orenstein said. “We are coming out of a very difficult 12 to 15 month period. At least here is a sign of hope that things will keep moving.”
“I think everyone was really confident that we would get there,” he added.
The Durst organization was represented by Gary Rosenberg, Dennis Hellman, Eric Orenstein, David Horn, Stefanie Graham, Casey Delaney and Zachary Rockoff of Rosenberg & Estis PC.
The banks were represented in origination and securitization by Bonnie Neuman of Cadwalader Wickersham & Taft LLP.
Citibank was represented on certain aspects of the loan restructuring by Stephen Brodie of Blank Rome LLP.
–Edited by Orlando Lorenzo and Marygrace Murphy.
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