Meridian Capital Group Acquires $125M for Harlem Retail Center

Meridian Capital Group acquired $125M in balance sheet and mezzanine financing for a retail center in Harlem.  The property is six stories and 200,000 square feet.  The site was owned by Jeff Sutton/Wharton Properties and already has Burlington Coat Factory, TD Bank, Olive Garden, and several other major retailers.  There are plans to open a Whole Foods over the summer.  The transaction was negotiated by Meridian executive vice president Aaron Birnbaum and vice president Tal Savariego.  The first mortgage was arranged by Morgan Stanley and the mezzanine loans were from J.P. Morgan.

Meridian Capital Group is a commercial real estate finance and advisory firm that was founded in 1991.  Their headquarters is located in New York.  This is not their first venture into Harlem.  Last week, they arranged the financing for a $7.4 million acquisition for the purchase of two multifamily properties in central Harlem.  This space held 74 units total, and one retail space.  They also arranged $30.4M in agency financing for the refinance of two multifamily portfolios in Harlem and Morningside Heights.  The 15 multifamily properties consisted of 174 units and three retail spaces.

Representatives from Meridian think that the deal will be very beneficial.  Their new package will replace the $102 million construction financing deal provided by Natixis Real Estate Capital that included a $95 million three-year interest-only mortgage.

“Meridian arranged first mortgage and mezzanine financing to repatriate the borrower’s equity and refinance construction financing that Meridian previously arranged for this property. The new balance sheet financing provides interest-only payments at a favorable rate and gives the borrower flexibility to  continue its operation of the asset.”

– Tal Savariego, VP

It is important to note the rising interest in Harlem investment as other areas of New York City become increasingly expensive.  More investors are looking towards Harlem due to its convenient location and the ease of transportation via subway.  However, this also brings worries of gentrification as many of the retailers, like Whole Foods, that are moving into these new spaces are too expensive for the neighborhood’s inhabitants.  At the same time, the increased development will have a positive effect on the community’s economic and infrastructure growth.