655 5th Ave, New York, NY

Debt Acquisition | RISA

Transaction Summary

Brickman purchased a junior participation in a $135mm senior loan secured by a two building portfolio in New York, NY in March 2009.

The loan was acquired from a major money centre bank. The floating rate loan carries a spread of 1.32% over LIBOR and matures in September 2012. Brickman purchased the note for a discount and syndicated the senior participation simultaneously.

The Portfolio consists of 2 properties: a 49,373 square foot building that commands a premier location in Midtown Manhattan on 5th Avenue and a 383,607 square foot office building that is currently well leased in Downtown Manhattan.

Investment Strategy

The strategy on the loan was to hold to maturity.

The investment is expected to provide for excellent risk-adjusted returns on mispriced debt at a low cost basis collateralized by quality assets with stable cash flows. 

Brickman's cost basis in the properties is $221 per square foot at the discounted purchase price and $312 per square foot at par. The debt service coverage ratio (DSCR) at acquisition was 5.1x ; the DSCR at a market interest rate on the underwritten net operating income was 1.20x.