Elliott Cements Real Estate Strategy With New York City Deal

Paul SingerBy World Economic Forum (Flickr: The Global Financial Context: Paul Singer) [CC BY-SA 2.0], via Wikimedia Commons

The historically neglected lower Manhattan real estate market near city hall is about to get a boost from Paul Singer’s Elliott Management.

The New York Times is reporting that Elliott is participating in financing to develop one of the historic skyscrapers in Manhattan into a mixed hotel and condominium building.

Making New York’s City Hall area hip

The effort is being led by the fund’s growing real estate division. Under Timothy Mackey’s stewardship Elliott will invest $150 million with GFI Capital Resources, the New York developer of the Parisian inspired NoMad hotel and the “bumping” Ace hotel, both located just north of Gramercy Park.

Elliott singer’s growing appetite for real estate

This is the second New York real estate investment for the activist investor Singer, who is more accustomed to subtly strong arming corporate boards than he is at investing in growing hip real estate deals. But since 2009, the Times notes, the fund has added teams of analysts in London, Hong Kong and Tokyo to place more than $2 billion of the fund’s $24 billion under management.

Elliott has found a niche: going where the banks don’t.  During the fall of 2013, the hedge fund invested in Silverpeak Real Estate Finance, a commercial real estate lender, and welcomed Mark A. Walsh, the former head of Lehman Brothers’ real estate division.  However, Elliot is likely not to invest in opaquely packaged securitized mortgage derivatives, is speculation.

The lower Manhattan hotel project will save and restore the brick and terra cotta skyscraper at 5 Beekman, a 130 year-old classic structure that had fallen to relative neglect.  The structure, the report noted, was originally built to house lawyers and civil servants who frequented the regional courthouses and City Hall and has been mostly vacant for two years.  Plans to redevelop the building into a hotel were scuttled after a bank foreclosed on a loan in 2008.  In 2012 GFI Capital resources paid a relative high price that is now considered a bargin, snapping up the property for $64 million and the adjacent lot for $22 million.

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About the Author

Mark Melin
Mark Melin is an alternative investment practitioner whose specialty is recognizing a trading program’s strategy and mapping it to a market environment and performance driver. He provides analysis of managed futures investment performance and commentary regarding related managed futures market environment. A portfolio and industry consultant, he was an adjunct instructor in managed futures at Northwestern University / Chicago and has written or edited three books, including High Performance Managed Futures (Wiley 2010) and The Chicago Board of Trade’s Handbook of Futures and Options (McGraw-Hill 2008). Mark was director of the managed futures division at Alaron Trading until they were acquired by Peregrine Financial Group in 2009, where he was a registered associated person (National Futures Association NFA ID#: 0348336). Mark has also worked as a Commodity Trading Advisor himself, trading a short volatility options portfolio across the yield curve, and was an independent consultant to various broker dealers and futures exchanges, including OneChicago, the single stock futures exchange, and the Chicago Board of Trade. He is also Editor, Opalesque Futures Intelligence and Editor, Opalesque Futures Strategies. - Contact: Mmelin(at)valuewalk.com

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