Herzog and Diaz of CBRE Capital Markets arranges $8 million

CB Richard Ellis (CBRE) Capital Markets recently arranged financing for 4289-4305 Park Ave. and 422 East 178th St. The five multifamily, 4-story walk-ups include 105 vacant units. Arranged by Max Herzog, senior vice president, and Michael Diaz, associate, of CBRE Capital Markets, the financing extended to the borrower consists of an $8 million acquisition/construction loan at an 8.5% floating interest rate for the 18-month term, and was provided by a foreign bank with a strong local presence. While under contract for the last 15 months, the borrower intentionally vacated the properties to renovate the units and achieve market rents. This strategy, which was common from 2005-2008, resulted in a property with no current cash flow, making it increasingly difficult to finance in the current credit environment. CBRE Capital Markets needed to find a lender that could handle the construction/renovation aspect of the project and could also take into account the story behind the property. "Our CBRE team was able to leverage the strong relationships we have with senior bankers at the lending institution," said Herzog. "This allowed the bank to understand the history behind the buildings involved and the client's business strategy, which ultimately was the reason this transaction successfully closed despite severe time constraints," said Herzog. CB Richard Ellis Group, Inc., a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world's largest commercial real estate services firm (in terms of 2008 revenue). The company has approximately 30,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 300 offices (excluding affiliates) worldwide. CB Richard Ellis offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. CB Richard Ellis has been named a BusinessWeek 50 "best in class" company three years in a row and a Fortune 100 fastest growing company two years in a row.