Proverbs 16:18 Pride goeth before destruction, and an haughty spirit before a fall.

(A different pride)

(A different pride)

You can read all this in the comments section to the earlier Antares post but it’s so much fun, I’d hate for it to get lost. From 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: Strategic Value Partners to Shut Down $600 Million Debt Fund.

(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.

2 Comments

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2 responses to “Proverbs 16:18 Pride goeth before destruction, and an haughty spirit before a fall.

  1. CEA

    Yikes, I wasn’t expecting to be a “main” post.

    Wanted to add: Antares paid $136.7 for the building, and claimed to have put in $50 mil in renovations. So they’re in for $185, say.

    At $135/sf (x 154,000 sf), that’s $21 mil in revenues. If they say they have $16 mil in cash flow, then they have $5 mil in annual costs.

    If they building is leased up, it’s leased up and Plainview/SVP are on the hook for $8 mil and $6 mil, respectively, per year. I don’t know if they’d try to, or can, wiggle out of their leases.

    And who knows who the other player/(s) are for that last 46,000 sf, if they in fact exist.

  2. Cos Cobber

    wow, good info. that dubious quote of theirs about lunch money will never be forgotten.