1. REAL ESTATE ALERT: August 12, 2015, 5 Marine View Plaza, Suite 400, Hoboken NJ 07030. 201-659-1700
Two real estate pros have formed an investment shop with
an unusual strategy: It will help property buyers defray the cost
of property purchases by kicking in the value of the underlying
land.
The firm, Anika Equities GLF of New York, is headed by
longtime lender Daniel Edrei and Avison Young principal David
Eyzenberg. With backing from a family office and wealthy
individuals, they are looking to deploy some $400 million of
capital, including leverage, over two years.
The pitch is that a property buyer can reduce its equity outlay
and boost its return by selling the underlying ground to Anika,
which in turn would lease it back to the buyer for 99 years. Anika
issayingthatthecombinationofthegroundleaseandamortgage
on the leasehold interest could enable a buyer to finance 85-95%
of its purchase price — higher leverage than can be typically ob-
tained in the mezzanine-debt market.
Anika will typically look to plow at least $15 million of equi-
ty into each investment, although it will consider smaller deals.
It also plans to focus on stabilized properties, but will also look
at construction projects.
The ground leases would carry fixed rent increases. That
avoids hikes tied to the Consumer Price Index or fair-market
value, which Anika says can often prove onerous.
Also, Anika is telling property buyers it can help them line
up mortgages on the leasehold interests via Avison Young, where
Eyzenberg is maintaining his position in the New York office.
While ground leases are common in New York and some
other markets, they are seen less frequently in secondary mar-
kets. Anika contends the tactic can work just as well in such
areas, especially because the gap between capitalization rates
on ground leases and on leasehold interests is typically wider
in secondary markets than in primary markets. By spinning off
the ground at a relatively low cap rate, reflecting its lower risk,
the buyer can realize a higher return on the leasehold interest.
Edrei previously spent 21 years at Meecorp Capital Markets
of Fort Lee, N.J. He founded Anika Equities earlier this year,
and this month joined with Eyzenberg to set up Anika Equities
GLF as a subsidiary to pursue the ground-lease strategy.
Before joining Avison Young, Eyzenberg had stints at in-
vestment shops Prodigious Capital and Ramius Capital, both of
New York. He previously worked at Merrill Lynch and has been
teaching at New York University’s master’s program in real es-
tate for a decade.
New Shop Uses Novel Ground-Lease Strategy
See GRAPEVINE on Back Page
THE GRAPEVINE
Cadre, a new real estate investmentoperation in New York, has hired MichaelLefton as a managing director. Leftonspent 11 years at Starwood Capital,where he was a director focused oncapital raising and investor relations.He starts next week at Cadre, reportingto co-founder and chief executive RyanWilliams. The firm, whose co-foundersalso include brothers Jared and JoshuaKushner, aims to use its website to connectinstitutional investors to commercialreal estate deals. It hasn’t yet detailedits strategy any further. Initial backersinclude former Vornado Realty executive
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15 MARKET SPOTLIGHT
Rental Sales Jump 61%; CBRE Has Wide LeadFundamental changes in the U.S. housingmarketaresupercharging sales of large
apartment properties, putting the sector on track for another record year.
Some $37.2 billion of rental properties changed hands in the first half, a 61%
increase over the same period last year, according to Real Estate Alert’s Deal Data-
base, which tracks trades of $25 million and up. Already, 2015 is more than halfway
to breaking the $66 billion annual record set last year. If second-half sales grow at a
similar rate, the year’s total could top $100 billion.CBRE remained the sector’s dominant broker, handling $9.6 billion of first-half
sales, while three firms were in a tight raceforsecond place(see Rankings on Page10).
Most experts see the makings of a sustained investment boom. Occupancy rates
and rents are up in most markets, despite a rush of construction, and forecasts
almost unanimously call for more of the same. Homeownership rates are falling
and expected to stay down, with more people renting for longer periods of time for
See RENTAL on Page 10Abu Dhabi Team Nears Deal for Exeter BundleA partnership between Abu Dhabi Investment Authority and PSP Investments is
negotiating to pay Exeter Property roughly $3.25 billion for a 55 million-square-foot
portfolio of industrial properties.At the $59/sf price being discussed, the initial annual yield would be about 5.9%
for Abu Dhabi’s sovereign wealth fund and PSP, a Canadian pension investment
manager. Eastdil Secured led the marketing campaign with assistance from CBRE.
Two back-up bidders are waiting in the wings should the parties fail to con-
summate an agreement. One is Ivanhoe Cambridge, a unit of pension fund advisor
Caisse de Depot et Placement du Quebec. The other is Ping An Insurance of China,
which may be partnering with a sovereign wealth fund.
The potential sale would be the latest in a string of blockbuster industrial deals
this year and solidify Abu Dhabi as a major force in the sector. The sovereign wealth
fund made its first foray into the U.S. warehouse sector in April, teaming with PSP
See TEAM on Page 14New Shop Uses Novel Ground-Lease StrategyTwo real estate pros have formed an investment shop with an unusual strategy:
It will help property buyers defray the cost of property purchases by kicking in the
value of the underlying land.The firm, Anika Equities GLF of New York, is headed by longtime lender Daniel
Edrei and Avison Young principal David Eyzenberg. With backing from a family office
and wealthy individuals, they are looking to deploy some $400 million of capital,
including leverage, over two years.Thepitchisthatapropertybuyercanreduceitsequityoutlayandboostitsreturnby
selling the underlying ground to Anika, which in turn would lease it back to the buyer
for 99 years. Anika is saying that the combination of the ground lease and a mortgage
on the leasehold interest could enable a buyer to finance 85-95% of its purchase price
— higher leverage than can be typically obtained in the mezzanine-debt market.
Anika will typically look to plow at least $15 million of equity into each
See LEASE on Page 13
AUGUST 12, 2015