Aegis Asset Management Invests $130 Million in New York Manhattan's 'Meatpacking Plaza'

[Asia Economy Reporter Lim Jeong-su] Aegis Asset Management has invested $130 million (approximately 150 billion KRW) in the remodeling project of a major building in the Meatpacking District shopping area in Manhattan, New York State, USA.

According to the investment banking (IB) industry on the 30th, Aegis Asset Management established the real estate private equity fund ‘Aegis US Specialized Investment Private Real Estate Investment Trust No. 401’ and executed a total of $130 million in senior and mezzanine loans for the remodeling of Manhattan’s Meatpacking Plaza.

The loans were divided into a $65.3 million (approximately 75 billion KRW) senior loan to the project operator MePa Realty LLC and a $63.2 million (approximately 72.7 billion KRW) mezzanine loan to MePa Mezz LLC, the parent company of MePa Realty. The maturity is 24 months, with an option to extend up to 3 years.

MePa Realty and MePa Mezz, which borrowed from Aegis, must repay the principal in a lump sum at maturity. However, early repayment before maturity is possible from 18 months after the loan date depending on circumstances. If the Meatpacking Plaza building is sold to another investor, the loan must be repaid early to Aegis immediately.

Aegis Asset Management raised about half of the funds needed for the fund investment through securitization of beneficiary certificates. The fund’s beneficiary certificates were transferred to a special purpose company (SPC), which then issued short-term securitized bonds backed by these assets. Meritz Securities led the fundraising and provided credit support to the SPC for the repayment of the securitized bonds during this process.

The Meatpacking District, located along the Hudson River in the United States, was once densely populated with slaughterhouses and meat processing plants, but since the 1990s, young artists have flocked to the area, developing it into New York’s premier shopping street. Recently, with Google relocating its headquarters to this area, it has emerged as a Google economic zone combining shopping and office functions.

Meatpacking Plaza is one of the oldest landmark buildings in the area, and redevelopment is underway to increase residential and commercial facilities while preserving its original form due to its symbolic significance. As it is a low-rise building, the usable building area is expected to expand significantly through redevelopment.