Carlton Forms Principal First Mortgage Platform Called CSV Mortgage Capital, LLC to Originate First Mortgage Loans up to 65% LTC  

New York, NY (February 13, 2009) — Carlton Strategic Ventures, LLC (“CSV”), the principal transaction group of Carlton, has formed a first mortgage venture that will principal first mortgage loans up to 65% LTC.  The company is partnering with a consortium of investors, including the principal investment arm of an investment bank and a major real estate private equity fund. 

Carlton Chairman, Howard L. Michaels has announced that this new first mortgage lending platform will be called CSV Mortgage Capital, LLC (“CSV Mortgage Capital”) and will provide desperately needed first mortgage capital to borrowers.

CSV Mortgage Capital will be targeting transactions of an overall size of $50 million and higher with first mortgage amounts no greater than 65% LTC.  The venture will target the following types of transactions:

• Borrowers who have an opportunity to acquire their loans from the existing lenders at a discount and need first mortgage proceeds to facilitate the recapitalization;
• Borrowers who have construction projects with strong collateral values and need capital to facilitate renovations and interest or reserve balancing;
• Transitional properties which require tenant improvement or leasing dollars to lease a vacant space or re tenanting to add value;
• Borrower’s who need capital to refinance maturing loans; and
• Low leverage land loans secured by well located, approved, and entitled land parcels in major markets.

The new CSV venture intends to invest in first mortgage loans in a time when this type of debt is virtually non-existent in the market.  The loan parameters of CSV Mortgage Capital are as follows:

• All asset types (including condominium and hotel);
• Up to 65% market adjusted LTV for last dollar invested;
• Mostly floating rate loans with 2 year terms (and one 1 year extension option) but will consider fixed rate loans with maturities no greater than 5 years;
• Loan amounts up to $100 million; and
• Targeting non-stabilized and development properties.

Separate from this venture, an affiliate of CSV Mortgage Capital has already acquired over $500 million in performing, discounted loan assets which consisted of 10 separate stand alone transactions located in prime markets across the United States.  CSV has been most active in acquiring hospitality and office assets but will consider all asset types.  In addition, CSV Capital, LLC, another affiliate of CSV, has an existing $400 million joint venture with a major insurance company to originate and provide mezzanine and preferred equity loans on a principal basis.  Furthermore CSV Capital can also acquire performing discounted mezzanine loans, B-Notes, preferred equity and participation interests in the secondary market.

Carlton’s Chairman, Howard L. Michaels along with recently hired former JPMorgan Vice President, John Barker, former Bear Stearns Director, Dax Scharfstein, and 10 other senior investment bankers and analysts will be the principal team originating, underwriting and executing CSV Mortgage Capital’s principal transaction business.  Deal inquiries and questions regarding CSV Mortgage Capital’s business should be directed to Howard L. Michaels, Michael J. Campbell or John Barker who can each be reached at (212) 545-1000.

The Carlton Group is a leading international real estate investment banking firm prominent in equity and debt placement, investment sales, and commercial and residential loan sales. Founded in 1991, Carlton has consummated in excess of $45 billion of transactions since 1998.  CSV is the Carlton Group's principal investment business. CSV makes opportunistic and value-add investments in all asset types, joint ventures or preferred equity investments.  Carlton is headquartered in New York, and maintains offices in West Palm Beach, FL, Atlanta, GA, Chicago, Illinois, Washington D.C. and Tel Aviv, Israel.
   

Howard L. Michaels Transacts over $2 billion in Large, High-Profile Deals

Posted By Susan Piperato, 01/09/09

NEW YORK, NY - Notwithstanding a terrible 2008 for most dealmakers, Howard L. Michaels, Chairman of real estate investment bank The Carlton Group, completed $4 billion in 2008 transactions. Michaels, who is best known for being a tremendous client advocate, demonstrated his hard hitting, aggressive style of accessing equity and debt capital, and closed some of the year’s largest transactions.

His 2008 deal list includes the following:

• $630 million equity and debt recapitalization at 666 5^th Avenue - This is sure to be a “Deal of the Year” winner as Michaels performed the near impossible and coordinated with multiple lenders to raise $630 million to recap the retail condominium at 666 5^th Avenue. The recap was even more dramatic as owner Charles Kushner was facing a potential default on a $335 million mezzanine payment due July 1, 2008. Unlike some of the other less fortunate, Michaels was able to recap the deal at a near 100% valuation for Kushner.

• 1372 Broadway - Michaels organized and closed this $300 million deal with high net-worth equity investors and a great finance package from Wachovia.  SL Green and Wachovia were the sellers.  

• 1250 Broadway – Michaels arranged a $175 million first mortgage and $40 mezzanine loan for the acquisition of 1250 Broadway by Murray Hill Properties and Jamestown Properties.

• $500 million of performing, discounted loan acquisition - Michaels, through Carlton’s principal group, Carlton Strategic Ventures (CSV), continued its merchant banking enterprise and selectively acquired $500 million in discounted first mortgage and mezzanine note positions from financial institutions.

• Carlton advised sellers on over $1 billion of residential and commercial loan assets for some of the country’s largest financial institutions. Assets ranged from partially completed townhouses and single family developments to large mezzanine loans secured by hospitality assets. Carlton has been one of the country’s leading loan sales advisors for the last 10 years and this group has continued to flourish as cash-constrained financial institutions look to create liquidity through the sale of loan assets.

Michaels is currently executing approximately $1 billion in confidential New York City transactions, which are comprised of two large, high-profile Manhattan deals scheduled to be announced in early 2009.

In addition, Michaels’ firm, The Carlton Group, completed $4 billion in 2008 transactions including the following:

• Approximately $300 million in four equity and debt transactions located overseas in Latvia, Poland, Croatia and Berlin. Of these transactions, Carlton, working through its Tel Aviv office and Ido Kapner and Neil Bane, a Director in Carlton’s Manhattan office, accessed Canadian pension funds and other international debt and equity sources to complete the acquisition of two ground-up development deals and 5,000 existing apartment units in Berlin.

• $63 Million Bridge Loan – Executive Campus - Arranged acquisition financing for a Class A office park in Fort Lee, NJ;

• $300 Million Equity Financing – Multifamily Portfolio - Arranged $100 million of JV equity for the acquisition of a 3,000 unit Texas multifamily portfolio.  Total project capitalization was $300 million;

• $92 Million Acquisition and Mezzanine Financing – 511-541 25th Street - Arranged $65 million first mortgage and $27 million mezzanine loan to finance a  160,000 sf commercial condominium conversion located in the Chelsea Art Gallery District in Manhattan.