NorthStar/RXR New York Metro Real Estate Invests in Loan for NYC Condo Development

August 10, 2017

NorthStar/RXR New York Metro Real Estate Invests in Loan for NYC Condo Development

August 9, 2017 | James Sprow | Blue Vault

Office building close up

NorthStar/RXR New York Metro Real Estate Inc., a publicly registered nontraded real estate investment trust sponsored by Colony NorthStar (NYSE: CLNS) and RXR Realty, completed the origination of a $12 million pari passu interest in a $20 million mezzanine loan, according to a August 7, 2017 8-K filing with the Securities and Exchange Commission.

The loan is secured by a pledge of an ownership interest in 11-19 Jane Street, a condominium development project located in the West Village of New York City. The property is owned by an affiliate of New York City-based developer Edward J. Minskoff Equities Inc.  The borrower’s business plan is to develop the property into a luxury condominium property containing approximately 31,000 sellable square feet comprised of seven residential units and six parking spaces.

NorthStar/RXR completed the Investment through a partnership with an affiliate of RXR Real Estate Value Added Fund – Fund III LP, an institutional private equity real estate fund sponsored by RXR Realty LLC, NorthStar/RXR’s co-sponsor and affiliate of its sub-advisor. NorthStar/RXR and Fund III invested $12.0 million and $8.0 million, respectively, into the partnership, which in turn indirectly owns the loan.

The loan bears interest at a floating rate of 9.50 percent over the one-month LIBOR, with a LIBOR ceiling of 1.5 percent. It has a 1 percent origination fee and an initial term of three years with two one-year extension options. The loan-to-cost ratio is approximately 83 percent. The LTC Ratio is the aggregate amount loaned to the borrower over the estimated current cost of the project.

NorthStar/RXR funded the investment with proceeds from its ongoing initial public offering.

NorthStar/RXR New York Metro Real Estate focuses on investing in commercial real estate concentrated in the New York metropolitan area, primarily office, mixed-use, and to a lesser extent, multifamily properties. The offering was declared effective in February 2015 and has raised $29.4 million in investor equity, as of August 4, 2017.



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Gregory De Jong, CFP, Co-Founder of Paragon Advisors, LLC.
July 7, 2015

Blue Vault is just what advisors need to size up the different offerings in the nontraded REIT market. Just as importantly, it’s what the industry needs to encourage best practices among REITs.