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January 18, 2019  

SocGen Maps First Solo Single-Borrower Deal

Societe Generale will launch its first solo single-borrower securitization next week.

The offering will be backed by a senior $210 million portion of a $410 million fixed-rate loan it originated this month on a repositioned mixed-use building on Manhattan’s Far West Side. The 464,000-square-foot property, at 787 11th Avenue, is owned by a partnership between Georgetown Co. of New York and the family of hedge-fund operator Bill Ackman.

SocGen previously participated in eight single-borrower deals, all since 2016, as a co-bookrunner and co-originator. In each of those transactions, another bookrunner held the first position in the pecking order.

This marks the first time SocGen will be the sole originator and bookrunner, taking responsibility for managing the relationship with the borrower, overseeing the sale of bonds and coordinating with rating agencies and other participants in the deal.

SocGen has divided the loan into a $310 million senior component and a $100 million B-note. The $100 million portion of the senior component that isn’t going into the single-borrower deal will be included in conduit offerings. SocGen will separately place the B-note with investors.

The property is between West 54th and West 55th Streets, along a once-gritty stretch of 11th Avenue long used for auto showrooms. Georgetown and Ackman, who founded Pershing Square Capital of New York, teamed up to buy the building in 2015 from Ford Motor for $255.5 million. The duo renovated the property and repositioned it for high-end office tenants. The lobby, elevators and other infrastructure were revamped, windows were enlarged and a double-height floor was created, along with a 12,000-sf roof deck.

The building is 88% occupied. Co-working firm Spaces has leased 99,000 sf on two upper floors. Auto dealers Jaguar and Land Rover occupy the first five floors. Pershing Square and Dwight Capital are also tenants.

The Georgetown partnership used most of the proceeds from SocGen’s loan to retire a $349.5 million loan that Blackstone originated to finance the renovation.

SocGen’s commercial MBS team is led by managing director Wayne Potters and includes managing directors Adam Ansaldi and Robert Pucel. The group is aiming to originate $2.5 billion of CMBS loans this year, with about half earmarked for single-borrower deals. Last year, SocGen was the 13th largest contributor of loans to CMBS deals, supplying $1 billion to conduit offerings and $546.5 million to single-borrower transactions.

CORRECTION (1/25/19): This article has been revised. The original article misstated the rate type of a $410 million loan that Societe Generale originated on a mixed-use building at 787 11th Avenue in Manhattan. The rate is fixed, not floating.