Real Estate Weekly: Sonnenblick sets records

We are midway through 2005 and the real estate capital markets remain more liquid and robust than anyone can remember. Maybe it's our young age or selective memory; in any event, Sonnenblick-Goldman is pleased to be advising its clients on a multitude of exciting financing, sale and capital-raising transactions around the world.

Our Capital Markets experts and research team believe that the balance of 2005 will continue to be characterized by cheap and plentiful debt, combined with a voracious appetite among equity investors to put investment capital to work by investing in core and value-add investment opportunities.

In the investment sales arena, Sonnenblick-Goldman has been involved in a range of record-setting transactions.

We started the year by completing the sale of the Hilton San Diego, which was, at a price in excess of $300,000 per key and reflecting a 6% cap rate, a new record for the area. Moving from the west coast to the east coast, we arranged the $113 million sale of a retail condominium on Madison Avenue to Vornado Realty Trust at a price of $6,700 per square foot, and the sale of The Melrose Student Housing Portfolio for a sub 6% cap rate.

Other significant transactions thus far this year include the sale of the Four Seasons Hotel in Toronto at a 5% cap.

At the same time, our Debt Capital Markets Group has completed a wide variety of financing transactions, including major office financings, such as 711 Third Avenue and 142 W. 57th Street in New York. Within the lodging market, the firm has completed several large financing transactions (some at approximately 5% rates for 75% LTV, fixed rate loans) including the $65 million refinancing of the Hyatt Regency Sacramento with an Asian bank and the $155 million financing of a luxury resort/casino in Las Vegas.

Finally, in the specialized area of joint venture equity financing, Sonnenblick-Goldman has continued to be a leader. We recently completed one such transaction by procuring a major domestic insurance company to recapitalize Metropolitan Tower in Manhattan, a 250,000 sq. ft. trophy office building on W. 57th Street.

Our current pipeline for the remainder of 2005 includes more equity and debt recapitalizations, construction loans for condos, hotel sales, urban retail sales, acquisition loans for all property types in major markets throughout the country including as well as programmatic equity raises for strong private operating companies.

With so much capital available to owners and developers of commercial real estate, our role is more important than ever. Having the right capital structure, with respect to pricing, term, prepayment flexibility, interest rate hedging, and working relationship is critical to the success of any real estate investment.