Sovereign Partners is ruling its domain at 100 Fifth Avenue thanks to a refinancing package.
Rialto Capital provided a $150 million loan to refinance the Midtown South office building, the Commercial Observer reported. A Newmark team including Jordan Roeschlaub and Chris Kramer negotiated the deal.
Sovereign — led by brothers Cyrus and Darius Sakhai — acquired the 20-story office building in 2023 for $126.5 million. That was barely half the $230 million price Clarion Partners paid to acquire the property a decade earlier.
During its short stewardship of the building, Sovereign has brought the 277,000-square-foot property up to full occupancy, inking 170,000 square feet of new leases. Adobe is the building’s anchor tenant.
Beyond the refi, it’s been a busy couple of months for the Sakhais.
Last month, Sovereign Partners sealed the deal on a $273 million acquisition of 2 Grand Central Tower from Rockwood Capital. The deal for the 667,000-square-foot property broke down to $409 per square foot. The last time Rockwood tried to sell (back in February 2020), the private equity investor had expected to sell the tower for close to $580 million.
Rockwood purchased the office building in 2011 from Boston Properties, now BXP, for $401 million. Boston Properties bought it for almost $428 million in 2008 from Harry Macklowe, who developed it.
Rialto, through its affiliate Rialto Capital Management, is the country’s largest buyer of CMBS B-piece notes. Those notes give the investor the ability to select the special servicer on the loan, including selecting its own affiliate.
The company’s servicing arm has garnered a reputation for aggressive techniques. New York landlords who borrowed from the since-collapsed Signature Bank have accused Rialto of “unlawfully manufacturing” defaults, The Real Deal previously reported.
— Holden Walter-Warner
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