ABR and Bald Eagle Partners Purchase “B” Note from Morgan Stanley
Contact: Peter Bancroft
Baltimore, MD (October 17, 2008) – Alex. Brown Realty, Inc. has partnered with Bald Eagle Partners (BEP) to purchase a $10 million “B” note from Morgan Stanley. The “B” note was purchased at a discount to par value and is secured by a first lien on RiverCenter Towers I and II Class “A” office property containing a total of 553,000 square feet. The “B” note matures in June 2014 and carries a 6.6% pay rate.
The RiverCenter Towers are located in Covington, Kentucky and are directly across from the historic Roebling Bridge that connects Covington with downtown Cincinnati, Ohio. The RiverCenter Towers are part of the larger river-front development that includes two hotels, an additional office building, and a 22-story condominium tower designed by noted architect Daniel Libeskind.
Given its location, river views and accessibility, the property competes directly with Class A office space in downtown Cincinnati. The joint venture sees its Covington location as a positive. “RiverCenter retains an edge over its Cincinnati competitors due to Covington’s lower expenses and inexpensive parking, both of which translate into lower occupancy costs for the tenant,” commented Scott DeCain, co-founder and principal at BEP. “That positions RiverCenter well in its competition for tenants with its Cincinnati neighbors.”
The joint venture anticipates that an uptick in occupancy will ultimately support a higher market value upon maturity of the note. “Since we purchased the “B” note for less than par and the debt is well below the current market value of the property, we see this as a stable investment opportunity that carries promising return potential,” noted Peter Bancroft, ABR’s senior vice president and acquisition officer.
This marks the first joint venture between ABR and BEP. “Given their experience in structuring and managing transactions of this nature, we look forward to working with BEP,” commented John Prugh, ABR’s president and CEO. “Based on our purchase price, we are very pleased with the relationship between risk and reward in this investment.”
Bald Eagle Partners, LLC (BEP) was formed in 2007 and composed of four former executives of Vornado Realty Trust (NYSE:VNO), The Mills Corporation, AvalonBay Communities (NYSE:AVB), and the Charles E. Smith Companies. The principals collectively have more than 100 years of real estate experience. www.baldeaglepartners.com
Alex. Brown Realty, Inc. (ABR) is a privately owned real estate investment manager organized in 1972 and headquartered in Baltimore, Maryland. ABR co-invests with joint venture partners in a broad spectrum of property types located throughout the United States. www.abrealty.com