Ackman-Ziff jumps hurdles to secure $255m loan deal

Real Estate Weekly, July 6, 2005

The Ackman-Ziff Real Estate Group LLC has arranged a $225 million forward take-out for Phase 1 of the multi-phase construction of World Market Center in Las Vegas, Nevada.

The 1.3 million gsf building is comprised of two floors of design center space, which will be open year round, and eight floors of permanent furniture showrooms, which will be open two weeks each year for furniture and home furnishings trade shows.

Ackman-Ziff arranged a non-recourse 10-year loan with an advantageously modified amortization schedule. Ackman-Ziff was able to overcome multiple hurdles in generating this attractive financing for its clients. The concept of a specialty building, 80% of which will only be open for two weeks per year, was a complicated issue for many lenders to overcome. Additionally, 100% of the building's leases will expire within five years.

Ackman-Ziff was able to negotiate a beneficial reserve structure, which also allows for the reserves to be reduced by 50% after the first five years.

Substantial completion of World Market Center was achieved in May thereby allowing tenants to begin building out their space two months prior to the beginning of their leases and three months prior to World Market Center's highly anticipated first trade show.