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Winthrop Completes Pass to Maefield, Sells New Times Square Development with Interactive NFL Exhibit for $1.5 Billion

Liquidating Trust Sells Majority Share in Under Construction, Mixed-Use Project to JV Partner Maefield Development, which has Lined Up New Investors Including SoftBank's Fortress Investment Group
May 4, 2018
The trust set up to liquidate the real estate holdings of Winthrop Realty sold one of the former REIT's most valuable assets, a majority stake in the partnership developing a new hotel, high-end retail space and a massive LED sign in the heart of New York City's Times Square.

The buyer in the $1.53 billion transaction is Winthrop's partner in the joint venture, Indianapolis-based Maefield Development, which has lined up new deep-pocketed investors to join it in the venture and recapitalize the project, including SoftBank's Fortress Investment Group.

Construction is well underway on the large, mixed-use project at 701 Seventh Ave. [also known as 20 Times Square.] Workers are in the final stages of finishing the centerpiece of the project, a 39-story, 452-room Marriott Edition hotel.

Other components include 76,000 square feet of retail/showroom space and a huge, 18,000-square-foot LED billboard sign, which became part of Times Square's famous streetscape last August. The project will also include 40,000 square feet of restaurant space, including an outdoor seating area overlooking Duffy Square.

The National Football League and its players association previously committed to open an interactive exhibit in the project. The NFL teamed up with Cirque du Soleil, the Montreal-based theatrical production conglomerate, to design and operate the immersive and interactive elements of the exhibit, which opened last fall. The 39,130-square-foot space encompasses part of the project's street-level space on Seventh Avenue, as well as the entire second, third and fourth floors.

The Hershey Co. also signed a lease for 6,940 square feet of ground floor space, bringing the project to 67% occupied. The venture's leasing brokers continue to market the remaining vacant space for lease.

Under terms of the sale, the liquidating trust set aside a portion of its proceeds to cover the cost of completing construction.

Maefield has been a partner in the mixed-use development since when it was announced in 2014, along with Marriott International, Ian Schrager and The Witkoff Group, Winthrop Realty and Vector Group.

Financing for the transaction is being led by the U.S. arm of French bank Natixis, which is reportedly providing $1 billion of the funding. Natixis officials declined to comment.

However, the securities arm of Natixis filed preliminary paperwork for a new single-asset, single-borrower CMBS offering backing a loan on the development. Issuance of the securities usually follows within a week or two of such a filing. Other lenders involved in the purchase include Column Financial and China Merchants Bank Co.

Natixis has completed six other CMBS offerings this year averaging just $189 million each after completing only one CMBS offering last year.
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