Somerset inks $200m mortgage for 'cookie' building.

Somerset Partners LLC, the New York City-based private real estate investor, closed a $200 million fixed-rate mortgage through Wachovia Securities on 85 Tenth Avenue, the 600,000 s/f office building in the Chelsea sub-market of Manhattan that Somerset Partners acquired last month for a reported all-cash purchase price of $300 million.

Wachovia was selected from a number of institutional lenders bidding on this assignment. A spokesman said the loan is likely to be securitized with other mortgages.

The asset at 85 Tenth Avenue represents the first office acquisition for Somerset Partners, which has built a $250 million portfolio of more than 3,000 apartments throughout the Southwest and Southeast U.S. over the last three years. Somerset's acquisition team was led by Keith Rubenstein and Marshall Allan.

"The all-cash acquisition and subsequent financing of 85 Tenth Avenue reaffirms Somerset Partners reputation as decisive investors with the ability to close quickly," said Mr. Rubenstein, Somerset's Director of Equity Investments.

Built in 1913, 85 Tenth Avenue, the former Nabisco Factory, has since 1999 benefited from a complete repositioning and nearly $250 million of capital improvements made by Level 3 Communications, which had leased the entire property and added an 11th floor before the bottom dropped out of the telecom market. Today the property is one of the most technically advanced buildings in the Country.

With 12 building generators providing 2 megawatts of redundant (backup) power each, the building can fully function on its own without public power or water for up to 30 days. The building is currently 100% leased with no rollover for 10 years to credit tenants such as the U.S. Government, Lehman Brothers, Moet Hennessy, College Sports Television and the State of New York. It features efficient 56,000-sq.ft. floor plates, high ceilings (up to 18-feet), 14-ft. window lines and unobstructed city and water views. 85 Tenth Avenue will also soon be home to two of New York's most anticipated new restaurants: Craft Steak from Chef Tom Colicchio and Del Posto from Chef Mario Batali.

"The property at 85 Tenth Avenue is an incredible asset and marks a new phase in our ongoing investment strategy," said Mr. Allan, co-founding partner of Somerset Partners. "While we still are actively pursuing multi-family assets nationwide that fit our core investment profile, our first investment in the Manhattan office market proves that Somerset Partners will be an active investor whenever the right opportunity presents itself."

Somerset Partners acquired the property from a partnership of Angelo Gordon & Company, Belvedere Capital and Irwin Cohen of ATC Management. The seller was represented by Douglas Harmon of Eastdil Realty, LLC. Somerset Partners was represented by legal counsel Dennis Hellman of Rosenberg & Estis, P.C.

In June, Somerset Partners announced the close of its $100 million Somerset Multi-Family Fund I, which is supporting an aggressive $400 million acquisition campaign of Class-A multifamily housing. Since 2002, Somerset Partners has completed seven significant acquisitions to assemble a $250 million, 3,000-unit portfolio made up of properties in markets such as Atlantand Wichita.