Island Capital Group buys historic Lexington Hotel

In early July, Andrew Farkas’ Island Capital Group, in conjunction with MCR and Three Wall Capital, purchased the historic Lexington Hotel, located at 511 Lexington Avenue, NY, for $185 million. Built in 1929, the 725-key Marriott International-branded hotel is known as a staple of hospitality along Lexington Avenue.

Island Capital’s offer comes in at 55 cents on the dollar when compared to the seller’s original purchase price. The seller, DiamondRock Hospitality Company purchased the hotel in 2011 for $333.7 million.

The purchase of the Lexington Hotel marks the first investment through Island Capital’s pandemic war chest, a $350 million fund created to target assets in New York negatively impacted by COVID-19. Farkas describes the purchase decision as a “plug-and-play opportunity” due to the time and money already invested in the renovation of the hotel by DiamondRock. 

Per the American Hotel and Lodging Association (AHLA), hotel markets around the U.S. are facing a “depression,” with New York’s hotel scene included. The purchase by Island Capital is an encouraging contradiction. Come 2022, New York City expects a hospitality rebound, with Andrew Farkas, founder, chairman and CEO of Island Capital, citing increasing tourism and business travel as key components of getting back to normal.

“We are proud to acquire the Lexington Hotel and we are excited about the reopening of the property as we emerge from the pandemic,” Farkas said. “We are confident that New York City will bounce back from what has been a very challenging time in [its] history… we are well positioned to capitalize on the return of [its] booming hospitality industry.”

Throughout the years, the Lexington Hotel has served as an iconic landmark, visited by celebrities, athletes and entertainers. Shut down due to the pandemic in March 2020, the hotel will reopen August 1, managed by MCR as part of Marriott’s Autograph Collection. 

June Exantas Capital Corp Earnings Conference Call

This month’s Exantas Capital Corp. Earnings Conference Call began with opening remarks from Andrew Farkas, Chairman of the Board. As disclosed in the most recent Exantas Capital Corp. earnings release, the company sold their entire CMBS portfolio, other than the B-Piece investment they held unlevered, which resulted in a $180.3 million loss on sale. Farkas is confident that the team will find themselves prepared for whatever opportunities they may be presented with once the markets begin to normalize. Farkas ensures, “The objective… is the company emerges strong and solid as we go forward into the market and make certain that we have a future for all of our shareholders and for the organization.” 

While Exantas certainly felt comfortable with the CMBS portfolio they had acquired, the lack of liquidity in the CMBS market during that time led to pricing that was not reflective of underlying value and led to margin calls inconsistent with the fair value of their assets. The size of the CMBS portfolio and retained investment-grade CLO notes prior to the disposition was $548.8 million at cost, yielding a net investment of $112.8 million before any margin calls and other deposits. As of April 21, Exantas terminated all of their interest rate swaps associated with their disposed CMBS portfolio and realized an $11.8 million charge to equity as a result of the swap terminations, of which $11.3 million was recognized on March 31. 

Farkas ends with remarks about the unprecedented manner in which the economic crisis occurred, and how profoundly it has affected the company. As stated in both the beginning and end of the call, the aggregation of liquidity and strength of the company continue to be at the forefront of the management team’s current priorities.

Read the full transcript here:

Exantas Capital Corp. Expands Its Lending Platform

Exantas Capital Corp. is a real estate investment trust that is primarily focused on originating, holding and managing commercial real estate mortgage loans and other commercial real estate-related debt investments. The Company is externally managed by an indirect wholly-owned subsidiary of C-III Capital Partners LLC, known as Exantas Capital Management Inc.

Through the integration of C-III Commercial Mortgage with its affiliate and external manager, Exantas Capital Manager, the company has been able to expand its commercial real estate debt platform to include fixed-rate commercial real estate loans. This integration enhances Exantas Capital Corp’s commercial real estate market presence and provides its borrowers a comprehensive offering of transitional to permanent financing solutions. C-III Commercial Mortgage is a leading originator of commercial real estate loans and has originated $3.2 billion of fixed-rate loans and $2.1 billion of floating-rate loans since 2010.

The Chairman of Exantas Capital Corp., Andrew L. Farkas, commented: “We are proud to take the next step in out multi-year strategic transformation by scaling Exantas’s commercial real estate presence and deployment capacity to the benefit of our borrowers and the company’s shareholders. Our expanded platform will accelerate our deployment, which in turn will drive Core Earnings and support our dividend without diminishing our credit standards at a time when spread compression is being felt through the industry.”

It is reported that the company is pleased with the opportunities created and will now be able to provide its customer base with the full suite of products available in the real estate capital markets, including short term floating-rate loans, longer term fixed-rate loans as well as preferred equity and mezzanine debt. This will allow Exantas to retain the lending business of a portion of their floating-rate borrowers who are executing on business plans and seeking longer-term, fixed-rate financing.

Patek Philippe St. Maarten Superyacht Destination Showcase Powered by IGY Marinas and Jewels by Love

Founded by Andrew Farkas and headquartered in Fort Lauderdale, Island Global Yachting (IGY) is the largest international superyacht destination company in the world. The company focuses on acquiring, controlling and/or servicing luxury marinas and surrounding real estate properties to maintain world-class lifestyle destinations.

IGY’s yacht club in St. Maarten, known as Ise de Sol, was awarded the 2017 Superyacht Marina of the Year and hosts many of the world’s largest superyachts through the company’s annual Superyacht Destination Showcase. IGY has partnered with Jewels By Love in 2020 to create an unrivaled experience where attendees will have the opportunity to take part in private viewing experiences of Patek Philippe pieces.

Patek Philippe’s private viewing event will be held in February with Island Global Yachting and Jewels By Love sending out direct invites. Other events and activities have been planned throughout the remainder of the year to celebrate one of the world’s most iconic brands and the culture of St. Maarten.

Exantas Capital Corporation Reports Results for 2019 Three and Nine Months

On October 30th 2019, Exantas Capital Corporation reported results for the three and nine months ended September 30, 2019. 

Some significant items that were highlighted are the Core Earnings were $0.31 per common share, they acquired $105.1 million and $739,1 million of new commercial real estate loans, and their economic book value is up $13.71 per common share from $13.63. In addition, Core Earnings were $0.31 per common share-diluted and $0.84 per common share-diluted for the three and nine months. Common stock cash dividends of $0.25 and $0.675 per share were declared and have been paid for the three and nine months. Exantas Capital CorpC-III Capital Partners is a fully-diversified asset management and commercial real estate services company.

Lead by Andrew Farkas, Exantas Capital Corp. is externally managed by Exantas Capital Manager Inc., an indirect wholly-owned subsidiary of C-III Capital Partners. C-III is an investment management and commercial real estate services company of which Andrew Farkas is the CEO and Chairman. 

Exantas Capital Corp. Declares Quarterly Dividends for Common Stock and Series C Preferred Stock

On September 12, 2019, Exantas Capital announced that its Board of Directors has declared a cash dividend of $0.25 per common share. This is for the end of the quarter which ends on September 30. The Board also declared a cash dividend on its 8.625% Fixed-to-Floating Series C Cumulative Redeemable Preferred Stock for the July through October period. This would amount to $0.539063 per share. This dividend is expected to be paid on October 30, 2019.

Exantas Capital Corp. is a REIT that focuses on originating, holding, and managing commercial real estate mortgage loans. They also focus on other commercial real estate related debt investments. It is externally managed by Exantas Capital Manager Inc, a subsidiary of C-III Capital Partners LLC. C-III Capital Partners is a diversified asset management and commercial real estate services company founded in 2010. It’s grown to include fund management, principal investment, mortgage origination, loan servicing, investment sales, property management, and brokerage. C-III Capital Partners is a controlled affiliate of Island Capital Group LLC, a leading international merchant bank.

Led by Andrew Farkas, Island Capital Group and its subsidiaries has managed to grow organically and through acquisition. Farkas is the founder, Chairman and CEO of Island Capital Group LLC, Island Global Yachting, and works closely with C-III Capital Partners LLC. Andrew additionally founded Insignia in 1990 which became the largest owner and operator of multifamily real restate.

C-III Capital Partners buys West Palm Beach’s Northbridge Tower

New York-based C-III Capital Partners and Chicago-based Vanderbilt Office properties teamed up in purchasing the Northbridge Tower, located in West Palm Beach, Florida for $98 million. The Northbridge tower, referred to by locals as the “Darth Vader” tower due to its dark windows, is a 294,000-square-foot building full of Class A office space that is currently inhabited by tenants such as Wells Fargo and Qwest.

The building was previously purchased in 2016 through a joint venture by Boca-Raton based Crocker Partners and Westport, Connecticut-based Greenfield Partners in 2018 for $68 million. An additional $15 million was put into property renovations to upgrade existing features and to add a barista bar, cafe, and conference center.

Brett Reese of Crocker Partners comments that since the renovations, rent per square foot has increased by a total of $22, from $20 when the building was purchased in 2016 to the current price of $42. Along with this increase in value per square foot, Reese says that West Palm Beach is becoming a destination for tenants in investment management and private equity, noting that there is a demand from investors for class A office space.

“Since we renovated, we brought in over ten new family offices and private equity [firms] to the building,” Reese said. “Historically it has been a building where lawyers have gravitated to given its proximity to the courthouse. It’s now changed. We are seeing more financial services.”

At the acquisition of the Northbridge Tower by C-III Capital Partners and Vanderbilt Office Properties, the building was 60% leased, according to Reese, leaving office space for more financial services companies and other potential employers to inhabit in the future.

C-III Capital Partners is one of the largest firms specializing in CMBS in the United States. Andrew Farkas is the CEO and Chairman of the investment management and commercial real estate services company, an affiliate of Island Capital Group LLC.

Resource Apartment REIT III, Inc. Purchases Apartment Community

On June 26th, Resource Apartment REIT III, Inc., sponsored by Resource Real Estate, LLC (“Resource”), purchased The Summit, a high-rise apartment community located just outside of the nation’s capital in Alexandria, Virginia.

The Summit is located in an area that will see immense growth in the near future due to Amazon’s HQ2 headquarters situated a 15-minute drive away in Crystal City. The property also offers desired amenities such as spacious floor plans, an outdoor pool with seating and lounge areas, and a fitness center.

REIT’s CEO, Alan Feldman, comments that The Summit’s location, and millennial appeal, will be crucial to its success.

“The Summit is ideally positioned where America works and plays – a fact that should become even more apparent with the future impact of Amazon on the Washington, D.C. metropolitan area,” said Alan Feldman. “The community also sits in a walkable setting with direct highway access, a positive for the influx of well-educated Millennials looking to make Alexandria home.”

With the median home value in The Summit’s metro area sitting at 127 percent above Washington, DC’s median, many buyers cannot afford to buy a home, and can find many of the same luxuries in an apartment, with added benefits such as close proximity to major employers such as the Pentagon and Fort Belvoir/Quantico.

Resource Real Estate, LLC (“Resource”), the sponsor of REIT, is a wholly-owned subsidiary of C-III Capital Partners LLC, a fully integrated asset management and commercial real estate services company led by CEO Andrew Farkas.

Exantas Capital Corp. Acquires Loans from C-III Capital Partners LLC

Exantas Capital Corp., a real-estate investment trust, recently acquired a portfolio of floating-rate commercial real estate mortgage loans worth $196.8 million from an affiliate of the company’s external manager, C-III Capital Partners LLC. With this acquisition, Exantas Capital Corp. can continue investing and originating in commercial real estate debt to meet their goal of full deployment by late 2019.

The acquired portfolio of 28 loans has an average loan size of $7 million, which will improve company diversification in asset class and geography. Following the deal, Exantas holds a commercial real estate loan portfolio size of $1.9 billion.

CEO of Exantas, Robert C. Lieber, stated, “This acquisition furthers Exantas’s efforts to strategically and effectively deploy liquidity into high-quality loans that offer attractive risk-adjusted returns. The transaction illustrates one advantage provided by our sponsor C-III Capital Partners, whose sourcing and underwriting platform continues to generate accretive origination opportunities that advance our deployment strategy and ultimately drive shareholder value.”

C-III Capital Partners LLC is an investment management and commercial real estate services company of which Andrew Farkas is the CEO and Chairman. Since its foundation in 2010, Capital Partners has become a leading firm in its industry through a broad range of business acquisitions and other activities. C-III is an affiliate of Island Capital Group LLC, a leading international merchant bank.

Andrew Farkas’ Exantas Capital Reports Quarterly Results

Exantas Capital Corporation (NYSE: XAN) recently reported their results for the three months and year ended December 31, 2018. Exantas Capital is an indirect wholly-owned subsidiary of C-III Capital Partners LLC, which was founded by Mr. Andrew L. Farkas. C-III and its subsidiaries work in commercial real estate investment management, and Exantas specifically specializes in originating, holding, and managing commercial mortgage loans.

In this fourth quarter report, Exantas reported $1.1 billion of new commercial real estate loans and commercial mortgage-back securities during the fiscal year, with $274.9 million originated in the fourth quarter alone. The book value dropped slightly at $14.02 per common share in the fourth quarter, compared to $14.23 per common share at the end of the third quarter. The GAAP net income allocable to common shares was $0.23 per common share. This is significantly better than the loss of -$0.28 per share at the end of the fourth quarter of 2017.

Exantas’ consolidated balance sheets show an increase from year-end 2017 to year-end 2018 in total assets and total liabilities and stockholders’ equity. This reflects an increase in CRE loans, company borrowings, and distributions payable, among other things.

Exantas Capital Corporation is a leader in CRE credit investments, and effectively leverages C-III Capital Partners’ capabilities to better serve its clients. By using C-III’s asset management platform, Exantas is able to provide clients with unique insights into real estate markets. Mr. Farkas has served as Chairman and CEO of C-III Capital Partners since its founding in 2010, and his extensive real estate experience has led C-III and its subsidiaries to success in the real estate investment industry.

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