J.P. Morgan, Fisher Brothers Provide $150 Million in Acquisition Financing

New York — J.P. Morgan is the lead lender of the $150 million acquisition financing for 520 Fifth Avenue, a development site located at the southeast corner of 43rd Street and Fifth Avenue in Manhattan.

Fisher Brothers provided the mezzanine portion of the financing to the borrower, a joint venture between Ceruzzi Holdings (Ceruzzi) and Shanghai Municipal Investment USA (SMI USA).

Thor Equities sold the site to the joint venture for $325 million, according to multiple media outlets.

520 Fifth Avenue is a 10,625-square-foot site with 85 feet of frontage along Fifth Avenue. The new owners plan to develop a new mixed-use tower that will consist of retail and either luxury condominiums or a combination of luxury condominiums and hotel. The undeveloped parcel has zoning square footage that will accommodate up to 355,000 square feet.

Before building the tower, Ceruzzi and SMI USA plan to first build more than 33,000 square feet of retail space at the site fronting Fifth Avenue.

“Given my long history and relationship with J.P. Morgan and 520 Fifth Avenue’s unrivaled development potential, we are delighted to have found a pre-development financing solution that allows us to set in motion a development project that will positively change the landscape of Fifth Avenue for generations,” says Louis L. Ceruzzi, Jr., principal of Ceruzzi Holdings. “It comes as no surprise that J.P. Morgan was able to deliver an attractive financing solution under a short timeframe.” 

Kevin Gao, a representative of SMI USA, says the deal was a home-run for the firm. “We are delighted to have entered into our second transaction with our New York partner, Ceruzzi Holdings, and are looking forward to bringing another iconic building to New York City,” says Gao.

Andrew Scandalios, senior managing director of HFF, led the firm’s investment sales team in marketing the site on behalf of the seller. 

HFF also arranged the acquisition loan on behalf of the joint venture. HFF’s senior managing director David Nackoul and associate director Christopher Peck arranged the 12-year financing through J.P. Morgan’s CMBS business unit.

“It was a privilege to have worked alongside the Ceruzzi and SMI USA teams to capitalize the last large-scale development parcel along the renowned Fifth Avenue that will pave the way for one of the most iconic mixed-use developments in the world,” says Peck.

J.P. Morgan’s Corporate & Investment Bank currently has $20.5 billion of assets under custody and $401 billion in deposit. The global firm’s CMBS business unit targets short-term financing opportunities in major markets and acquires commercial real estate loans in the secondary market.

Fisher Brothers is a New York-based, family-owned real estate firm founded in 1915 and now in its third generation. In addition to a development and management platform, Fisher Brothers has created a lending platform to originate loans on transitional assets in New York City and Washington, D.C.

SMI USA is the largest state-owned enterprise in Shanghai, China. The company has successfully executed 80 large-scale projects and has recently finalized its cornerstone project, the Shanghai Tower, a 128-story skyscraper in Shanghai that was designed by Gensler.

Ceruzzi Holdings LLC is a New York City-based developer, owner and operator of real estate properties. The company’s real estate professionals specialize in construction, entitlements, leasing, marketing, management and finance.

— John Nelson

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