Oct. 16, 2012
Starwood Property Trust
(NYSE: STWD) and
Starwood Capital Group
(on behalf of Starwood Distressed Opportunity Fund IX) today announced the co-origination of a
first mortgage loan and mezzanine loan for the acquisition and redevelopment of a 10-story retail building located at 701 Seventh Avenue in Midtown Manhattan. The building is situated on the northeast corner of the famed Times Square bow tie, one of the world's busiest shopping stretches with an estimated 500,000 visitors per day. The loan will have an initial funding of
of future funding for redevelopment costs and also contains an equity participation right for the lender. The primary sponsor is
The Witkoff Group
, a fully integrated real estate investment firm.
"This transaction is a prime example of our unique ability to provide and structure large, highly specialized loans on an expedited timetable that meets the needs of the borrowers while also completing our disciplined underwriting requirements" said
, Chief Executive Officer of Starwood Property Trust. "Our experienced team of professionals positioned us to provide a financing solution for The Witkoff Group and its equity partners while enabling Starwood Property Trust to meet or exceed our return targets."
The Witkoff Group, together with New Valley LLC, a subsidiary of Vector Group Ltd. (NYSE:VGR) and a subsidiary of Winthrop Realty Trust (NYSE:FUR), acquired the property from a non-institutional owner who successfully reassembled the site through a series of complex and lengthy negotiations with the property's existing tenants. Witkoff will implement a comprehensive redevelopment plan over the next 30 months which includes the demolition of the building's interior and its conversion into a new retail space with the bottom three quarters of the property dedicated to retail and the top one quarter dedicated to a food and beverage establishment.