CARLTON CLOSES $430 MILLION EQUITY AND DEBT RAISE AND RESTRUCTURE AT ONE PARK AVENUE

March 6, 2011

Carlton Chairman Howard L. Michaels announced the closing of a $430 million equity and debt recapitalization and restructure at One Park Avenue, an iconic one million sf office asset in Midtown.

This transaction represented a highly complicated restructuring and capital raise in that the $375 million first mortgage loan was in default and had been accelerated and was either headed to a foreclosure or discounted note sale. In addition, the senior mezzanine loan had been acquired by an opportunistic investor who was immediately set to commence a UCC foreclosure to gain control the asset. Carlton was retained on the evening of Thanksgiving and by the end of the year had miraculously gained consensus from all of the subordinate debt holders (which was held by four different parties) to accept a significant discounted payoff and had negotiated a standstill with the senior lender which allowed the recapitalization to move forward.

Simultaneously, the Carlton Team, under the leadership of Carlton Chairman Howard L. Michaels accessed several investors in a competitive process to provide up to $200 million of pari pasu equity with the property owner. Carlton then also ran a competitive process to get the best possible debt terms for a $250 million first mortgage. Concurrent with these efforts, Carlton helped negotiate a mutually acceptable payoff with the $375 million first mortgage which allowed the recapitalization to be finalized.

This transaction is typical of the billions of highly complicated, multi tranched transactions which Carlton has executed on behalf of some of the largest owners in the Unites States. Carlton prides itself on developing sophisticated valuation models while simultaneously negotiating with lenders and investors which have a diversity of interests and priorities in order to achieve a mutually acceptable resolution.

In addition, Carlton was able to draw on its substantial resources in order to quickly access qualified investors both from overseas and domestically who were able to move quickly providing the necessary equity on a timely basis without all of the deal pieces being totally buttoned up which is indicative of the way most restructures typically work. The Carlton team consisted of Howard L. Michaels, Michael J. Campbell and five other Carlton members that contributed to a synergistic effort with the owner in order to successfully recapitalize the property. Carlton’s client was Murray Hill Properties who remains as an equity investor in the recapitalized partnership along with continuing management and leasing responsibilities.

Carlton Advisory Services, Inc. is an international real estate investment banking firm prominent in commercial and residential loan sales and debt and equity placement. Carlton also specializes in arranging passive, promotable equity for real estate and real estate-related Fund vehicles for many of its clients who include some of the most successful developers and financial institutions around the world. Carlton was founded in 1991, and has consummated approximately $50 billion of transactions.

 

  Previous Next