“Survive ’til twenty-five.”
That’s the don’t-give-up-the-ship take on today’s beleaguered real estate-development picture of Ran Eliasaf, founder of Northwind Group. Eliasaf, who once captained an Israeli warship, braves the turbulent Manhattan-market waters with a commander’s confidence.
His “twenty-five” motto recalls the spirits-lifting “Stay alive ‘til ninety-five” in the early 1990s, when too much new office space flooded Midtown just as demand shrunk and developers lost empty, gleaming towers to their banks.
Private equity firm Northwind recently provided a $313 million construction loan for long-stalled 125 Greenwich St. to Fortress Investment Group, which can now complete the 80-story condo tower where work stopped in early 2019.
Eliasaf was quick to credit Fortress, which converted debt on 125 Greenwich to an equity position, as the project’s true heroes.
“They saved it by stepping in,” he said. “Once they had the right capital structure, we thought it was a great investment for us.”
He said that firms such as Northwind will also play a larger role in commercial-debt financing now that the major banks have gotten cold feet, especially since the collapse of First Republic, now absorbed by JP Morgan Chase, and other regional banks.
“We’re now in the front row of providing loans to major projects,” Eliasaf said. “Our role is providing the capital that you simply can’t get from banks. Most Northwind loans are for mixed-use combinations of residential and retail.”
His slow-but-steady recovery forecast struck a plausible middle ground between over-optimistic claims that the work-from-home phenomenon is almost over, as Vornado chief Steven Roth suggested last week, and doom-and-gloomers’ prognostications that the whole market is headed down the toilet.
“Nobody wants to touch office right now. But I believe it will be back,” Eliasaf said.
The now bifurcated market, where there’s a huge gap in viability between the best Class-A locations and the rest of the field, “will find new equilibrium,” he said.
But he predicted the impact of work-from-home will take two more years to wane.
“Then, it’s over,” he said.
Founded in 2008, Northwind has been in the lending-only business since 2017. Its portfolio includes $3 billion in assets-under-management of equity and debt investments in residential, commercial, senior living and healthcare properties.
Its other recent New York loans include $162 million to complete the conversion of 685 Fifth Avenue into Mandarin Oriental luxury residences.
No comments:
Post a Comment