Meritz Real provides $65.6 mn loan on Adidas’ Soho store

  • 2018-08-19

Meritz Real Estate Asset Management Co. Ld. has provided a $65.6 million loan secured against Adidas’ flagship store in Soho in New York City, underwriting the whole senior tranche originated by the retail space’s owner SL Green Realty Corp.

Meritz Real recently launched a fund vehicle to arrange the debt investment for South Korean insurance companies for an expected annual return of mid-5%, according to investment banking sources on August 17.

SL Green, New York city’s largest office landlord, sold the five-year loan to recover its investment and refinance debt on the space leased to global sports brand Adidas under a 10-year agreement since 2015.

It acquired the ground floor and two underground levels of the five-story building at 115 Spring Street in New York for $52 million in 2014.

The value of the retail portion is estimated at $100 million currently, according to the sources.

Adidas occupies about 500 square meters of the building in Soho, a top shopping destination where global fashion brands run flagship stores.

Earlier this year, Meritz Real arranged 70 billion won investment in mezzanine debt secured on the mixed-use office tower at 650 Fifth Avenue in New York, for an expected return of mid-5%.

A joint venture of SL Green Realty and Wharton Properties, founded by real estate investor Jeff Sutton, has a long-term leasehold on the retail space of the skyscraper.

Meriz Real’s chief executive officer Jun Hyun Shin said in July that US commercial buildings with global brand shops or fresh food stores are likely to generate strong returns enough to offset higher dollar hedging costs.

By Daehun Kim

daepun@hankyung.com

<Edited by Yeonhee Kim>

Photo: Getty Images Bank