Andrew Farkas – CEO, Island Capital Group

Centerline Capital Group recently provided a $39.6MM Freddie Mac loan to a multifamily property in Virginia Beach, Virginia called the Runaway Bay Apartments.  The refinancing is a 10-year loan and the proceeds will be used to take advantage of lower interest rates and pay off existing Freddie Mac debt.  Runaway Bay Apartments was built in 1985 and the property includes 440 garden-style units within 14 three-story buildings.  The borrower, Harbor Group International (HGI), purchased the property in 2008 and has spent over $1.1 million on improvements to the buildings.  HGI is based in Norfolk, Virginia and is a private real estate investment and management firm.  It currently owns 48 multifamily properties and manages 23,057 apartment units.

“The principals are repeat Freddie Mac borrowers with a proven track record owning and managing multifamily assets,” commented Kevin H. Smith, Director of Mortgage Banking at Centerline and the originator of the loan. “In addition, the property has enjoyed a historically stable occupancy, coupled with strong market fundamentals, which made this a highly attractive deal for Centerline.”

The Mortgage Banking Group at Centerline Capital Group provides mortgage financing for conventional multifamily properties throughout the United States.  Centerline Capital Group is a subsidiary of Centerline Holding Company, in which Andrew Farkas’ Island Capital Group is the largest shareholder.

Centerline Capital Group recently refinanced Forest Ridge Apartments through a $15.5 MM Fannie Mae first mortgage.  The apartments are located on 1B Hampshire Drive in Nashua, New Hampshire.  Nashua, called “The Gate City”, is along Route 3 and located 20 minutes from Manchester and 30 minutes from Boston.

“Nashua has been named one of the ‘Best Places to Live in America’ by Money Magazine, and is the only city in the country ever to win the honor twice,” commented Steven Cox, Senior Vice President, Commercial Real Estate at Centerline.  “The property is well-maintained, with a very high occupancy rate of over 95%. These factors made the Forest Ridge Apartment refinance a perfect deal for Centerline.”

The complex includes garden style multifamily buildings that were built in two phases in 1969 and 1972.  There are 21 two- and three-story buildings with a total of 370 units.  Of the total 370, there are 242 two bedroom-one bath units, 88 one bedroom-one bath units, 16 three bedroom-two bath townhouse units, and 24 two bedroom-one bath townhouse units.

With a 30-year amortization period, the loan is a 10-year fixed rate facility and will be used to refinance the existing balance on the property.

Centerline Capital Group recently provided a $6.6 MM loan facility, which was processed through Fannie Mae’s Multifamily Affordable Housing Program, that enabled the acquisition of two multifamily properties in Utah.  The two properties are located in South Ogden and Layton, Utah.  Both buildings hold 144 apartments and are garden-style communities.  Proceeds from the transaction facilitated an acquisition of both the LP and GP interest positions, which maintained the original borrowing entity for tax purposes.  Furthermore, the borrowing entity was able to change to an LLC from an LP.

“The borrower needed to close quickly to meet the requirements of the purchase agreements, and two days prior to rate-lock, the properties both suffered wind storm damage,” noted Philip Melton, senior managing director, Affordable Housing Debt at Centerline. “Thankfully, with the help of Fannie Mae, we were able to get the appropriate bids and contracts, complete the engineering report, and the closing was delayed only by two weeks.”

Centerline Capital Group provides real estate financial and asset management services for affordable and conventional multifamily housing.  It’s a subsidiary of Centerline Holding Company, which Island Capital Group is the largest shareholder of.  Andrew Farkas is CEO of Island Capital Group.

Centerline Capital Group recently provided a $45.2 million Fannie Mae affordable MBS facility to refinance four Harlem multifamily properties.  The loans carry similar terms: 75% loan-to-value, 10-year term, 35-year amortization, and 1.20 debt service coverage.  A privately held real estate development, investment and management firm located in Manhattan is the borrower in the transaction.  The firm spent a considerable amount of time improving operations, updating the apartments, and wants to provide long-term financing at low interest rates.  It also owns about 2,400 units throughout New York City, the majority of which receive rental assistance and provide affordable housing to its tenants.

Built between 1920 and 1984, the four properties include 388 apartment units in mid-rise buildings.  Each property has Section 8 HAP contracts covering 99% of the apartments.

“The principals have a proven track record in affecting positive change in residential neighborhoods,” says Philip Melton, senior managing director of Centerline’s Affordable Housing Debt Products Originations.  “Their extensive experience, broad knowledge and expertise in developing, financing and managing real estate in New York, especially in the Harlem market, combined with the deal’s solid real estate fundamentals, made this a highly attractive deal for Centerline.”

Island Capital Group is the largest shareholder of Centerline Holding Company, the parent company of Centerline Capital Group.

The dedication ceremony for Farkas Hall was held on February 10^th.  Harvard graduate Andrew Farkas was in attendance and enjoyed performances by the Harvard Krokodiloes and the Radcliffe Pitches during the cocktail reception.  At the close of the ceremony, Andrew spoke about his time at Harvard and his father, Robin Farkas who graduated from Harvard in 1954.  The theater was recently renamed Farkas Hall in honor of Robin Farkas.  To commemorate the event, Sandi Goff Farkas, Andrew’s wife, presented him with an elaborate miniature of Farkas Hall.

After the reception, the Hasty Pudding Club put on a special performance, HPT: 164: There Will Be Flood.  Parts of the play included several Farkas-related jokes.  The Hasty Pudding Club was founded in 1770 and is the nation’s oldest social club.

Andrew Farkas is the Chief Executive Officer of C-III Capital Partners, a provider of innovative real estate equity and debt solutions, and Island Capital Group, the controlling parent of C-III.  Island Capital Group’s portfolio companies currently own and/or manage approximately $150 billion in assets.

C-III Capital Partners recently completed the acquisition of NAI Global.  C-III Capital Partners, led by CEO Andrew Farkas, provides innovative real estate equity and debt solutions and is engaged in a wide range of activities, including loan origination, primary and special loan servicing, fund management and principal investment.  NAI Global, based in Princeton, New Jersey, is the world’s leading managed network of more than 300 commercial real estate firms and provides technology, management, marketing and corporate services support to its members and clients.

With 350 offices in the United States and 55 countries across the globe, NAI Global’s network includes 5,000 professionals.  It will continue to operate under its current management as a separate company.

“The completion of this transaction represents a significant step forward in our strategy to build a fully diversified commercial real estate services company,” said Andrew Farkas. “With the NAI Global acquisition, we are gaining the world’s leading commercial real estate network and a tremendous foundation for future growth.  As we begin a new year, we look forward to partnering with the NAI team to provide enhanced services to the commercial and institutional real estate markets they serve as well as continuing to take advantage of other opportunities to grow and expand our platform.”

To close out 2011, Centerline Capital Group financed two neighboring multi-family properties on Chicago’s North Side in Bucktown-Logan Square.  The total financial commitment was close to $6 million and was put together by senior vice president of the mortgage banking group at Centerline, Peter Margolin.  Both properties are four-story buildings located on North California Avenue.  The first property has 20 units and is only two years old.  The second property has 18 units and has been around for four years.

“Both of the properties are well located, bordering on two highly performing city neighborhoods, and the units are condo-quality apartments that are highly desirable to tenants,” said Margolin. “In addition, the borrower is a well-known local private developer that has built a number of high performing properties in the local area. These factors made this an attractive deal for Centerline.”

Centerline Capital Group provides real estate financial and asset management services.  Its focus is on affordable and conventional multifamily housing.  Centerline is a subsidiary of Centerline Holding Company.  Island Capital Group, which was founded by Andrew Farkas, is the largest shareholder of Centerline Holding Company.  With nearly 200 employees nationwide, Centerline is headquartered in New York City.

Earlier this week, C-III Capital Partners publicized the acquisition of two affiliated multifamily property management businesses – Pacific West Management and U.S. Residential Group.  C-III Capital Partners (C-III) offers real estate equity and debt solutions through a broad range of activities.  Pacific West Management (PWM) is based in Irvine, California and U.S. Residential Group (USRG) is based in Carrollton, Texas.  PWM and USRG manage around 24,000 multifamily units located in 12 states.

“The USRG and PWM acquisitions represent C-III’s next step in creating a fully diversified commercial real estate services company,” said Andrew Farkas, CEO of C-III.  “With the same leadership team that built Insignia, C-III is focused on building a diversified real estate services company designed to meet the demands of all constituents in the commercial real estate industry in today’s environment. We are confident that USRG, its management team and its strong client relationships will make valuable contributions toward achieving C-III’s goals, and we look forward to serving USRG’s clients and enhancing and expanding the services C-III and USRG can provide to them.”

As a result of the acquisition, PWM and USRG will operate as one unit under the U.S. Residential Group name.  Alan Fenstermacher will continue to lead the current management team.

Attendance continues to build for the inaugural New Jersey Apartment Summit, which will be held this Wednesday 11/2, from 7:30am-4:50pm. The commercial multifamily conference will be held at the Hamilton Park Hotel & Conference Center in Florham Park, NJ. To date, 277 executives from 174 leading commercial multifamily firms in 10 states have made plans to participate.

All of the region’s leading investors, owners, developers, managers, capital sources, brokers and multifamily industry service providers will be on hand for the event.  Additionally, anyone who works in multifamily in New Jersey, or the surrounding states, should attend this important industry gathering. National apartment and multifamily industry firms with an interest in New Jersey multifamily should also consider attending.

Attending firms include: Arbor Commercial Mortgage; BlueGate Partners, LLC; CallSource; Capital One; Centerline Capital Group; JP Morgan Chase; Met Life Home Loans; Prudential Mortgage Capital Company and Wells Fargo Advisors, LLC.

The full press release can be found on PR Newswire.

Andrew Farkas has endowed Harvard University’s New College Theatre in honor of his father, Robin Farkas.  To thank him for his generosity, Harvard is renaming the theater as Farkas Hall.  Andrew Farkas served as the Hasty Pudding Club president for two years before receiving his bachelor’s degree in economics in 1982.  The Farkas Hall is home of the Hasty Pudding Club and the Hasty Pudding Theatricals, which are the nation’s oldest social club and college theater group.

“My Harvard experience was amongst the most formative and significant in my life,” said Andrew Farkas.  “My times at the Hasty Pudding were amongst the most joyful and memorable.  That generations of Harvard students will learn, grow, and flourish in Farkas Hall, in the building that has been the ancestral home of the Pudding and all of the organizations it has spawned, is a great privilege for the Farkas family.  To know that the space will be preserved for use by those organizations, and that it will also serve to incubate the creative skills of Harvard’s emerging talent, is extremely gratifying.”

Andrew Farkas serves as Chairman and Chief Executive Officer for C-III Capital Partners, a real estate investment company.  He is also Chairman and Chief Executive Officer of Island Capital Group, a leading real estate merchant bank that is the controlling parent of C-III Capital Partners.