Apollo finances NY condos

The New York-based private equity real estate firm has provided $90m in mezzanine financing to the conversion of a former bank headquarters in Manhattan.

Apollo Real Estate Finance Corporation, formed this year as the debt investment fund of Apollo Real Estate Advisors, has provided $90 million (€70 million) in mezzanine financing to a project converting the former Manhattan headquarters of Chemical Bank into condominiums.

The 38-story building, located in lower Manhattan at 20 Pine Street, is being converted into 408 luxury condominiums by Leviev Boymelgreen Developers. Construction began in July 2005, while resale of the units began in January amid an aggressive marketing campaign capitalizing on the buildings affiliation with Armani Casa, which is designing the interior. To date, 60 percent of the units are under contract, according to a statement from Apollo.

Apollo Real Estate Finance is expected to close in the next few months on $600 million. Apollo is targeting a return of 16 percent to 18 percent for the new fund.

Previously, Apollo invested in a joint mezzanine fund, Apollo-GMAC Real
Estate Mezzanine Fund
in 2004. That Apollo-managed fund is expected to generate a return in excess of 20 percent.

AREFIN will focus on “assets in transition” that require substantial redevelopment, leasing or other significant repositioning. Nationally, the US condo market has led a slowdown of the overall housing market, causing many projects in areas such as South Florida and Las Vegas to unwind.