Massive office NYC financing question. I'm not sure if anyone here has worked with this, but any help would be appreciated
This may be a dumb question so just a heads up I'm a 22 year old who is relatively new to this.
I've only had time to learn the brokering side of the business and not anything further like financing or much else.
I'm selling an of office property in Manhattan completely off market that is in the millions of square feet range and would be in the multi billion dollars range
My question was how difficult (assuming the party was big enough) would it be for an overseas group to get financing for a asset type like this and how would financing have to be structured? I understand it would have to be syndicated but are there any additional hurdles to jump through that I should be aware of?
Additionally some of the same questions for US-based groups.
[{"id": "gqpfyoq", "text": "They would get financing in their native country and they would work out the underwriting etc.. be prepared to provide all current tenant info, expenses, etc.. and projections and all building info. \n\nYou know if you pull this off at age 22, you\u2019ll be a legend !!", "replies": [{"id": "gqpgkco", "text": "I'm not really expecting to pull it off at all but what I am doing is meeting a lot of very high up people in the process", "replies": [{"id": "gqpgqw7", "text": "Put together a very nice pitch packet, people are impressed by those.  Good luck and keep us updated!", "replies": [], "depth": 3}, {"id": "gqq6ovu", "text": "Came here to say how dumb this post was but your response here is amazing.  Good luck.  If I was hiring I\u2019d offer you a job!", "replies": [], "depth": 3}], "depth": 2}, {"id": "gqprwoe", "text": "No they wouldn\u2019t. Assuming the overseas buyer passes the bank KYC check, they can getUS financing.", "replies": [{"id": "gqq0zkj", "text": "What", "replies": [{"id": "gqq3po7", "text": "He's saying that a USA lender would be more likely to lend in USA than a foreign bank or investment group, and I agree.  Whether the investors in the USA lender are foreign is another matter.", "replies": [{"id": "gqq6gyw", "text": "Precisely. A US chartered bank (any bank licensed to do business in the US) will have the ability to lend in the US. If you\u2019re marketing that big of a property, your financing can range from balance sheet (lower leverage), to debt funds, or CMBS depending on the sophistication of the borrower. \n\nKYC check is \u201cKnow Your Customer\u201d which is required by US regulations. Not going into details but you won\u2019t be a part of it and don\u2019t have to worry. This includes capturing PEPs (Politically Exposed Persons), so for example, Joe Biden would not be eligible for a loan.\n\nMost large office properties have permanent financing that\u2019s CMBS, but REITS sometimes buy all cash.\n\nSource: Am in CRE.", "replies": [], "depth": 5}], "depth": 4}, {"id": "gqqob9f", "text": "He is right. On this size of deal money is what matters. As long as they are not politically involved or terrorist, they should be good.", "replies": [], "depth": 4}, {"id": "gqqzfrg", "text": "KYC= know your client.  Verification of borrower identify essentially.", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "gqpji5d", "text": "It can get complicated from a tax perspective (FIRPTA and otherwise).  And KYC and OFAC can always slow things down.  I closed a ~$100M transaction at the end of 2020 that involved investors from the middle east (I'm a real estate attorney).  Citi financed the deal. There are ways to structure around the tax considerations, but it's complex.  If you're curious, this is a bit dated but has some good information regarding the lay of the land: https://www.dlapiper.com/~/media/files/insights/publications/2016/12/337100_0_prel1701_kleinweiner.pdf?la=en&amp;hash=B71E14805B1830544A4408F49D72AEA2EACAADDA", "replies": [], "depth": 1}, {"id": "gqpmvzj", "text": "I would expect this to be a CMBS deal.  Most banks and life insurance companies won\u2019t want exposure north of $1 bn for a single asset.", "replies": [{"id": "gqprmw5", "text": "Sovereign looking for trophy asset possibly?", "replies": [{"id": "gqq3sy5", "text": "You never know until you ask.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "gqpvro1", "text": "I can put you in touch with CMBS bulge bracket UW if you want some guidance. Confidentially of course. DM me.", "replies": [], "depth": 1}, {"id": "gqq2pqi", "text": "If you actually have an in to sell a building like that, get a co-broker agreement with a large IS shop in town.", "replies": [], "depth": 1}, {"id": "gqq3p8w", "text": "22 and no idea what you\u2019re doing but someone is letting you sell their $1b+ asset? Seems legit.", "replies": [], "depth": 1}, {"id": "gqq6h5j", "text": "I think others have answered the question fairly well - my advice transaction side would be to find a solid debt shop to partner up with for the deal. Being able to present a pitch right alongside financing options should be par for the course, yet no one really seems to do more than \"and here is a loan broker you can call on this deal.\"\n\nThat being said, I am also going to heavily advise caution for your career. If you are doing this on your own, without backup from someone well seasoned in deals like this, you run the risk of both torching your reputation and legal pitfalls. The reputation angle comes from pitching something you don't actually understand and thus gaining a reputation for being full of shit. CRE is a small community - reputation is everything. The legal issue comes in that a lot of jurisdictions have a competency requirement in their licensing rules. If you lack the knowledge to actually rep the deal and then fuck something up, your liability protection through your E&amp;O could evaporate. Splitting commission sucks, but I would suggest partnering with a cap markets guy at a big shop and vastly increasing your odds of landing a win.", "replies": [], "depth": 1}, {"id": "gqqo3og", "text": "It would not be a lot more difficult than a local buyer. I work in CRE in Miami and almost half our clients are foreigners. If the NOI and the covering ratio is good, it should work. It can be syndicated, or be financed by an insurance company or it can be a CMBS, it depends on the size of the deal. BTW, if you close that deal, you would be legendary.", "replies": [{"id": "gqqr1ct", "text": "Agree about the legendary status. Disagree about LifeCo execution. For a $1B+ deal, it will most likely go BB bank with LifeCo capital partners. I think the largest LifeCo deal in 2020 was like $600MM", "replies": [], "depth": 2}], "depth": 1}, {"id": "gqqqop0", "text": "CMBS should have no issue with foreign capital. If you need to structure Mezz/pref this could get a little complicated. We closed a CMBS loan recently for some Albanian royalty with no hiccups. DM me if you have any questions. I'm also 22...", "replies": [], "depth": 1}, {"id": "gqr13kc", "text": "How the....\n\nGood luck!", "replies": [], "depth": 1}]