$33m loan allows firm to defease Penn Plaza mortgage.

CRG Realty Capital, LLC of Englewood, N.J. has closed a 20-year, $33 million low leverage loan with Prudential Mortgage Capital Company at highly favorable rates and terms on behalf of GHG Realty Company, LLC.

The $33 million deal was consummated at 5.79% for 20 years with a highly flexible pre-payment schedule. CRG beat out numerous advisors by devising a creative forward rate-lock hedge strategy which saved the borrower substantial pre-payment penalties.

CRG also assisted with the defeasance of the existing loan using short-term Treasury strips.

GHG used the loan proceeds to defease the existing securitized mortgage on 21 Penn Plaza, a 17-story, 352,500 s/f office building in Manhattan's Midtown South area. The loft office building, managed by SL Green, is currently occupied by Saks Fifth Avenue, Care Plus, and a list of other service-oriented tenants.

According to Mitchell Adelstein, CRG President, "The borrower clearly had the option of waiting until the loan matured, but we delivered a comprehensive strategy that eliminated long-term interest rate risk and created substantial savings due to rising short-term interest rates." The combination of the two strategies proved highly effective.

The President of GHG Realty, Bruce Gittlin said "CRG created a plan and sourced the right lender to underwrite and approve the plan. Their ability to understand the market and our goals, combined with effective underwriting, allowed us to achieve our goal quickly and successfully."

"Prudential Mortgage Capital Company was able to accommodate the borrower by providing a flexible loan structure," said Scott Chisholm, head of Prudential Mortgage Capital Company's New York region. "CRG was extremely helpful in making the deal happen smoothly."