3650 REIT announce $30 million preferred equity investment in acquisition of office property

Hoboken, NJ 3650 REIT (“3650”), a nationwide commercial real estate investment firm originating and servicing portfolio loans for relationship borrowers in addition to making other strategic investments, announced that it has made a $30 million preferred equity investment to help finance the acquisition of Waterfront Corporate Center I (the “Property”), a 13-story office asset consisting of nearly 523,000 s/f of office space and approximately 35,000 s/f of ground-floor retail located at 111 River St. in Hoboken, NJ. The investment carries a term of five years, and is provided to a joint venture comprised of David Werner Real Estate Investments, SJP Properties, led by Steven Pozycki, and Onyx Partners, led by Jeremy Rieder. The senior acquisition loan was provided by BMO Financial Group and is slated for the securitization market.

The Property is one of three similarly-sized and designed buildings making up the Waterfront Corporate Center portfolio, all of which were developed by SJP Properties. Waterfront Corporate Center is the cornerstone of the Hoboken office market, and its three assets are generally considered among the most desirable in the Hudson Waterfront office submarket.

“3650 REIT continues to pursue preferred equity investment opportunities in prime locations with experienced sponsors, and Waterfront Corporate Center is a perfect example of a fundamentally sound transaction,” said 3650 co-founder and managing partner Jonathan Roth. “Our multidisciplinary, asset-level approach has allowed us to invest in individual assets that we expect to perform well as market conditions evolve even in the face of broader headwinds for the office market. 3650 REIT is uniquely qualified to complete these types of transactions due to our deep understanding of the complexities and nuances of securitized senior loans. 3650’s high-touch process was instrumental to completing this investment in a timely manner, and we look forward to a continued long-term relationship with the transaction sponsors and with BMO Financial Group, the senior lender for the transaction.

Waterfront Corporate Center I is located just one block from Hoboken Terminal, the ninth-busiest transit hub in North America which is served by Metro-North and NJ Transit commuter rail lines, the Port Authority Trans Hudson (PATH) line, the Hudson-Bergen Light Rail and New York Waterway ferries, providing easy access for commuters to Manhattan, Jersey City and suburban submarkets throughout New Jersey. The Property, which features efficient, 40,000 s/f floor plates and sweeping views of the Manhattan skyline, is located on a ground lease from the Port Authority of New York and New Jersey in partnership with the City of Hoboken.

As a preferred equity partner, 3650 met the co-sponsors’ needs for flexible financing behind a securitized senior loan, and provided a deep understanding of the strategic positioning of the Property, the unique aspects of the underlying ground lease and the value proposition of the co-sponsors’ lease-up strategy. This is the second recent transaction that 3650 has closed involving David Werner Real Estate Investments and Onyx Partners following the recapitalization of a 12-property, 3,500-unit multifamily portfolio located across the Southeast U.S.

David Werner of David Werner Real Estate Investments said, “We are thrilled to be completing our second major transaction with 3650 REIT within the past six months. The 3650 team has proven adept at navigating complicated transactions, and their focus on relationship building is one that we share with our investors and capital partners.”

Senior Managing Director Drew Anderman and Assistant Vice President Eddie Haber of Meridian Capital Group arranged the financing.