Antares on hedge funds: these guys treat rent like lunch money

Last one out pays for lunch!

Last one out pays for lunch!

The actual quote from Mr. Joe Beninati, principal of Antares was “rent is as insignificant to these guys as the lunch bill.” We’ve asked this before: what if there’s no one around to buy lunch? What if the number of hedge funds drops 40%?

3 Comments

Filed under Buying/Selling Greenwich Real Estate

3 responses to “Antares on hedge funds: these guys treat rent like lunch money

  1. CEA

    Not only will the number of hedge funds drop significantly, but the ones who remain in existence will be smaller and fighting for their lives. I have heard that a big HF in Greenwich has a bunch of space up for sublease – and it was a fund that Antares thought might rent from them. It would not surprise me if Antares lost the UST development. They are not likely to lease it completely, and the prices at which they DO lease will be lower than their spreadsheets’ assumptions.

  2. Anonymous

    Antares has leased most of the buidling at $100+ rents. They just need to finish up the work and make sure their tenants don’t fold.

    The Antares guys are so obnoxious, it pains me to read about them. They are a polished version of the DFT LLC guys.

  3. CEA

    Well, here is what I know (and it is just public information, I am sure there is more).

    UST building is 154,000 sq ft: “Under the ownership of Antares, the 154,000 square-foot landmark property, formerly known as the US Tobacco Building, reached “lease-up” status a year
    ahead of company projections. Joseph Beninati, Antares Managing Partner said, “One Hundred West Putnam, acquired just 12 months ago at well below replacement cost, will produce the highest cash flows per foot of any commercial office building in the United States.”

    Even better, they took on so much debt that cash flow/interest coverage is a mere 2x: ” To take advantage of substantial cash flow, Antares has put in place long-term debt on the building with very low and stable interest rates. The nearly
    $16 million of property cash flow will produce approximately two times the annual interest cost at 100 West Putnam.”

    They have leased the bulk of the space to 2 hedge funds: Plainfield Asset and Strategic Value Partners: “Plainfield Asset Management will join the hedge firm Strategic Value Partners of Greenwich at 100 W. Putnam Ave. after Greenwich-based Antares Investment Partners renovates the 150,000-square-foot building.

    Sources, who requested anonymity because of the confidential nature of the hedge fund industry, said Plainfield leased 60,000 square feet at 100 W. Putnam and also will keep its office at 55 Railroad Ave. in downtown Greenwich. (Plainfield Asset Management for 60,654 sf and Strategic Value Partners for 44,065 sf at 100 West Putnam Avenue in Greenwich.)

    And how are those hedge funds doing, you might ask?

    Well, there’s THIS story:

    http://www.bloomberg.com/apps/news?pid=20601087&sid=aqwzWZDzgqx4&refer=home

    (SVP: had $5 bil in total assets under management)

    And then there’s this:

    Plainfield Freezes Redemptions
    Posted by Bess Levin, Nov 06, 2008, 4:54pm
    Plainfield Special Situations Master Fund, a $5 billion credit fund run by Plainfield Asset Management, apparently notified investors on a conference call yesterday that there have been over $1.6 billion in redemptions, and sorry, but the firm has supposedly decided to create a Special Purpose Vehicle which will liquidate redeemed assets over a period of years. Investors were given a choice to rescind their redemptions by November 30 or be issued interests in the new SPV.

    ______________________

    Were I Antares – I’d be nervous.