Savoy Park purportedly sold at no loss

Bloomberg reported (sorry no link) that a fund jointly started by Citigroup and L&M Development Partners bought the loan for "more than $210 million, the outstanding balance on the senior mortgage, satisfying the loan", but no additional details. The senior is in CSMC 2007-C1 and constitutes 7.08% of the collateral. Unlike some rent-control flips (i.e. PCV/ST), this is actually paying towards the A1A tranche, which is probably held by Freddie (although that is a complete guess).

The A2 is the current pay for the rest of the pool, and a small piece was on a BWIC yesterday. 13mm+ of the A3 was being offered at a 103 handle last week.


This was one of the rent control "let's kick out the rent control tenants and replace them with market-payers" projects that failed miserably. Vantage and Area Property Partners were the sellers.

We've previously discussed Savoy Park (fka Delano Village) here.

Savoy Park (CSMC 2007-C1) $210mm Seeks Refi

Another deal brought to you by a jv between Apollo (AREA) and Vantage Partners... Anyway, this is another rent control story in NY. Bought it for $175mm, leveraged it up to $367.5mm with $210mm in CSMC 2007-C1, and the $157.5 remainder in B-notes and mezz.

Without even looking, you can guess that this loan is with the special, but just so you know, it's not covering with a 0.49x DSCR (NCF; senior debt) at 97% occupancy. There is a healthy reserve, but even the Realpoint spokesperson quoted in the story in yesterday's WSJ notes that it should last "about another two months".

It's due 1/11/2014

The Golub Program

Cuomo has loaded his 50cal and has the sights squarely aimed at Vantage Properties for the whole kick out the pesky rent control tenants and replace them with market-paying tenants strategy.

Vantage & Apollo (aka AREA) Multifamily + CMBS Loan deals:
Esquire Portfolio (1.49%; CSMC 2007-C4)
Broadway Portfolio (2.13%, CSMC 2007-C2)
Savoy Park (6.25%, CSMC 2007-C1) (fka Delano Village)

"Vantage's business plans refer to this strategy of removing tenants from rent-regulated apartments to convert them to market rate apartments as the company's 'Golub program,'" the New York Attorney General's letter states. "Vantage's business plans highlight its Golub program as a means of generating tenant turnover. As reflected in Vantage's annual reports to investors and business plans, Vantage's business goals are to "generate unit turnover through active management of the Golub program and other legal efforts."

"The investigation revealed that Vantage often failed to exercise due diligence prior to serving tenants with Golub notices or other legal termination notices," the letter continued. "Vantage often commenced Housing Court proceedings seeking to evict tenants from homes in which they had lived for decades based on little more than database reports, which were often incorrect, or contradicted by other evidence in Vantage's possession."
..."Any experienced commercial real estate operator in New York would know better than to engage in the practices alleged in the AG's letter," said Charles Cecil, partner and CEO of Opin Partners, a CMBS and real estate investment advisor and investment management firm in New York.

The "Golub Program" is not a new movie in the Bourne series, but I liked it as a headline. It is just what Vantage termed it's strategy in reference to the "Golub Notice" that is required to be delivered to the tenant 90-150 days prior to eviction/removal from stabilized rent.

I'll update these as I discover more. Cuomo also took out a GBU-24 Paveway III and aimed it Ken Lewis and BOA this morning, and took off his white glove and smacked Moynihan across the face several times and challenged him to a pissing contest. Very busy over at the AG office today.