RECOVERY PROJECT

River East Center Recovery
Chicago, Illinois

Situation:
Located in the Streeterville area, River East is a multi-use project totaling 2 million square feet and includes 260,000 square feet of retail, 620 condominium units, 1150 parking space garage below grade, 455 key Embassy Suites Lakefront Hotel and 5 land parcels in the immediate area. Mitsui requested that Ridge stabilize and improve the assets in preparation for sale and recovery of its construction loan principal. Mitsui guaranteed the initial construction loan which defaulted and negotiated a deed-in-lieu of foreclosure to secure the assets.

Initiatives:
Ridge supported the deed-in-lieu of foreclosure process and managed the improvement and recovery of the loan principal. Over 150 people under 7 contracts were engaged to assess, stabilize, mitigate risks, improve and sell these assets. The pre-DIL valuation was $65MM.
The recovery also encompassed the demolition of the Kraft building including the mitigation of environmental issues, settling EPA fines, forensic accounting, sale of a mezzanine note for Riverview condominiums, cash recapture of garage revenue through capital investment plans, marketing/modification/sale of the remaining 231 condominium units, marketing and leasing of the remaining retail space (100,000 square feet), scope/cost elimination of duplicative functions between elements of the facility, completion of a $6MM construction punch list, revenue generation within the hotel component and entitlement/improvement/sale of the 5 land parcels.

Results:
Within 18 months of the DIL closing, Ridge recovered nearly all of the loss, selling out the remaining assets within 24 months and yielding a net gain including original premium. A total of $228 million in assets were improved and sold during this period with a team including Cairn Capital (London) and Jones Lang LaSalle (Chicago/New York). The client achieved their objective and created a success from what many lenders felt was a loosing proposition.

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TRANSITION PROJECT

Embassy Suites Battery Park
New York City, New York (Sep 2001)

Situation:
Located at the northwest corner of Ground Zero, ESBP opened the summer before 11 September 2001 and was used during the recovery effort as the room and board provider to rescue personnel and government agencies. The owners needed to refinance the construction loan without an operating history which eliminated most traditional lenders. In response, the owners sought the combined products of Bank of America and Mitsui Sumitomo Insurance (loan guarantor) who were willing to provide an $80+ million loan to Forest City Ratner Companies at a slight premium to market lending rates.

Initiatives:
The 911 event eliminated 13.5 million square feet of office space and 1160 hotel rooms in downtown New York City, significant damage to the World Financial Center and the closure of the mass transit system – all near and around ESBP. The customer base would change significantly which prompted the evaluation of the booking rates, customer base shift, renegotiation of corporate rates and more.  Ridge advised the lending group and provided suggestions to the owner to address retail and hotel occupancy issues and cost growth trends among other monitoring duties.
 

Results:
The project achieved the Lender’s objectives by paying off the loan one year before the expiration and fully performing. Currently, the hotel demands in excess of $400 per night and has one of the highest occupancy rates in New York City. Most hotel booking agencies and their customers rate the hotel 3 ½ stars with a 95% very satisfied rating.

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MONITORING PROJECT

Ritz Carlton Residences and Club
690 Market Street, San Francisco, California

Situation:
Located near Union Square, Ritz Carlton Residences and Club San Francisco offers its owners prestige, 4-star services and global recognition. Newly constructed in 2007, this 24 story building was restored from the former SF Chronicle Building with turn of the century façade. The owners wished to convert the old office building into residences through a $135 million construction loan.

Initiatives:
Ridge supported initial underwriting, closing and monitored the loan representing Morgan Stanley and Mitsui Sumitomo while addressing the risk associated with the façade renovation, specialty financing, cost overruns and re-scope to address sub-grade risks.
§Ridge advised the lending group and provided suggestions to the development partnership to address political, construction, sales/marketing, and below-market rate sales in another structure (942 Market Street) to permit the loan to perform.

Results:The project achieved the Lender’s objectives by permitting a short loan extension and loan payoff within its terms. The Owner’s objectives were achieved by achieving the highest price the market would offer in excess of pro forma and successfully delivering units on time in spite of difficult market conditions as a result of the sub-prime issue during 2006 and 2007. This is the first successful sale and operation of fractional units in an urban setting at the luxury level.

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CURRENT ASSIGNMENTS / PAST ASSIGNMENTS

CURRENT ASSIGNMENTS:

• Project assessment and monitor of construction loan for ParkView Tower residences in Chicago; loan administraton

• Project assessment and monitor of the construction loan for The Vue residences in Charlotte, North Carolina

• Project assessment and monitor for the new Alexander Villas in Las Vegas Nevada

• Project Monitor for the Ritz Carlton Hotel and Residences, Toronto, Ontario Canada for Munich Re/MEAG and the Royal Bank of Canada

• Market assessment for European client concerning San Francisco residential high-rise

• Ground up development of a hotel with supporting retail at a confidential location (co-developer)

• Financier of a new residential project in Chicago and related financings for other clients

PAST ASSIGNMENTS:

• Project Director for the recovery and liquidation of assets in Chicago, Illinois

• Project assessment and secondary monitor for Mitsui Sumitomo for the new Four Seasons in Seattle, Washington, and the St. Regis in Atlanta

• Marketing and sales review and assistance for a condominium project in Chicago; focus is to boost sales performance

• Project equity monitor for the Millennium Tower in San Francisco on behalf of Morgan Stanley

• Project assessment for refinance, land loan and construction financing of a five star resort, residences, marina, golf course and land in Costa Rica

• Project monitor and loan administrator for the Ritz Residences and club located at Market Street and Kearny Street in downtown San Francisco

• Project assessment for the new Four Seasons Denver

• Project Monitor for the Embassy Suites Battery Park hotel adjacent to Ground Zero

• Project Assessment of the Millennium Tower Residences located in the Battery Park district of New York City for a confidential client

• Project assessment of the Laguna Kai development in Mexico’s Riviera Maya area for a confidential client; a Rosewood managed asset

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CLIENT LIST

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