MRC Blows Past Target in Debt Fund Closing

NEW YORK CITY-Capping a week-long period which also saw no fewer than five financing transactions, Madison Realty Capital closed its Sullivan Debt Fund L.P. at $350.4 million. The final amount significantly exceeded the fund's $300-million initial target.

Limited partners in the fund include sovereign wealth funds, corporate pension funds, public pension funds, insurance companies, endowments, real estate fund of funds, and family offices. To date, the fund has completed $383.5 million of transactions, and it will have the capacity to invest more than $1 billion given leverage and capital recycling provisions.

“We are pleased to have attracted such an exceptional and well-rounded LP base,” says Adam Tantleff, a managing member of MRC. “We feel that this has been the direct result of having established ourselves as one of the premier middle-market capital providers and operators in the country.”

The company's lending activities are national in scope, while debt acquisitions have targeted major markets on the East Coast. Among them is Miami, where MRC this past June acquired a non-performing senior note from Wells Fargo with an unpaid principal balance of $5.2 million. The note was collateralized by the Puerta Del Sol Plaza retail center in Goulds, a sub-market southwest section of Miami.

Earlier this week, MRC arranged four separate transactions in Brooklyn totaling $18.35 million. In the largest of the four, MRC originated a $5-million loan, secured by a newly constructed five-story condominium building with 25 residential units and 13 parking spots at 345 Ovington Ave. in the borough's Bay Ridge neighborhood. The loan will be used to retire the existing mortgage, cover closing costs and help fund another project.

"These recent transactions underscore our continued interest and strong activity throughout the Brooklyn market," says Josh Zegen, co-founder and managing member of MRC. Other Brooklyn transactions announced earlier this week include $5.25 million in note purchase financing to acquire a non-performing first mortgage collateralized by 90-94 Sullivan Pl., a mixed-use property in Crown Heights; a $4.1-million million loan secured by a second mortgage for a newly built office building on Quentin Road; and a $4-million loan secured by a three-story mixed-use building in Park Slope.

Last week, MRC said it had provided a $7.15-million construction loan for a partially complete mixed-use property at 28-18 Astoria Blvd. in the Astoria section of Queens. “The desirable location of this property made it an attractive project for Madison Realty Capital and is another illustration of our ability to promptly complete a loan that meets the needs of the borrower,” Zegen said last week.