Hochfelder Teams With Belfonti in Opportunistic Venture
There's no better partner in the institutional game in New York than Adam.
Adam Hochfelder is back in the real estate investment business.
The former co-founder of Max Capital Management - which is now known as Monday Properties - has partnered with Michael Belfonti, a 25-year veteran of the industry, to pursue opportunistic investments throughout the country.
Hochfelder has been named president of Belfonti Capital Partners, LLC, while Belfonti is the firm's chairman. The unit is effectively an offshoot of Belfonti Associates, LLC, an entity that Belfonti had formed in 1980. Over the years, Belfonti had built a sizable portfolio of office and apartment buildings, but has since sold most of it. Belfonti capitalized those investments on his own.
Teaming up with Hochfelder allows him to tap institutional investors for capital - part of an effort to build a sizable portfolio.
"This is a launch into the institutional market," Belfonti said. "There's no better partner in the institutional game in New York than Adam."
Hochfelder is best known for building Max Capital Management into a substantial opportunistic player in New York. He formed the firm in 1996 with N. Richard Kalikow, whose interest in Max Capital he bought out in 2002. Many of his biggest investments were capitalized in large part by Credit Suisse First Boston.
Hochfelder's stake in Max Capital was bought out last year by Anthony Westreich, who then changed the firm's name to Monday Properties.
Belfonti Capital aims to pursue what could be classified as opportunistic real estate investments of $100 million and more across the country.
"We're looking to create value through repositioning, rehabilitation and capitalizing on economies of scale through management," Belfonti said. He further explained, "Value-added opportunities could take many shapes and forms," he said. "We're looking at everything: hotels, office, industrial, ground-up development, land acquisition, repositionings. And we're looking everywhere." Belfonti Capital has completed its first such acquisition, teaming up with Carlyle Group on the $88 million purchase of 485 Fifth Avenue, a 185,000-square-foot office building at the northeast corner of 41st Street, overlooking the New York Public Library's main branch.
The 95-year-old property was purchased from Tri-Realty Management Corp., a New York firm run by Jack Forgash, which purchased the property last May for $48 million from Tommy Hilfiger Corp. Hilfiger had occupied some 160,000 sf in the property, but had moved out to take space at the Starrett-Lehigh building, leaving the building mostly vacant. Hilfiger, incidentally, had purchased the property in 2000 from NorthStar Capital Management for about $37 million.
Belfonti's plan is to convert the 11-story property into luxury condominiums. That's not necessarily out-of-the-box thinking given the condo craze. But Belfonti saw in the unusually shaped building an opportunity others evidently didn't. The property extends in an odd 'L' shape from 41st Street to 42nd.
Belfonti lined up financing from HypoBank for the purchase and redevelopment of the project, which ultimately will have a $160 million pricetag. Carlyle is believed to have invested some $40 million of equity in the project.
It plans to physically carve out 28,000 sf from the property's middle, creating a courtyard that would provide views for units that otherwise would be virtually landlocked. It will then add four very high priced penthouse units to the top of what will effectively become two structures.
Source: Commercial Real Estate Direct.com - September 28, 2005