A New Jersey newcomer to Westchester County’s commercial office market has “tried to make a splash” in the nine months since taking over a prominent office-park portfolio, a leasing executive for the Morristown company said recently. At the same time, Normandy Real Estate Partners has made a large national splash in real estate markets on both coasts as an opportune buyer of distressed properties for which it was a mezzanine lender.

 

As with its office-building acquisitions this year in Boston and in the Los Angeles area, Normandy was a mezzanine lender in Westchester to RXR Realty L.L.C., formerly RexCorp Realty, for the Long Island-based company’s Platinum Mile portfolio, according to a source familiar with the deal. Normandy early this year took over the 14-building, approximately 1.5-million-square-foot portfolio spread across four office parks in White Plains and Harrison after RXR Realty was said to have defaulted on the loan.

 

A spokesman for Normandy said the company does not discuss details of its financial transactions. The company on its web site says its primary targets are the metropolitan New York, Washington, D.C. and Boston markets, where it is pursuing both office property equity and non-performing debt investments.

 

In late March, Normandy and another private equity firm, Five Mile Capital Partners L.L.C., based in Stamford, Conn., obtained the John Hancock Tower, Boston’s tallest building, at a foreclosure auction. The companies, both mezzanine lenders to the former owner, New York City’s Broadway Partners Fund Manager L.L.C. , reportedly paid $660.6 million. That was 50 percent less than Broadway Partners paid for the Boston landmark in late 2006, when it acquired it from Beacon Capital Partners L.L.C., owner of the 850,000-square-foot Westchester One at 44 S. Broadway in White Plains.

 

Normandy on its own last spring also acquired another foreclosed Broadway Partners property, the approximately 770,000-square-foot 10 Universal City Plaza, in Universal City, Calif., for a reported $304.75 million.

 

The vertically integrated private equity fund manager currently manages about $1 billion of equity commitments. Its portfolio includes numerous land development sites, 14 million square feet of commercial space, 2,500 apartments and  four hotels – including the Westchester Marriott in the town of Greenburgh, which it purchased from Morgan Stanley in 2007 with a joint-venture partner, Northview Hotel Group of Westport, Conn.

 

Along Interstate 287, Normandy at mid-year rebranded its Platinum Mile portfolio as The Exchange. The name, said Normandy principal Raymond P. Trevisan in a June press release, captures the property’s essence as “a place for the productive exchange of contacts and business ideas.” Among its more than 165 tenants, it might also describe the practice of exchanging office space within the parks that Trevisan recently likened to “musical chairs.”

 

Paul H. Teti, Normandy vice president who manages leasing at The Exchange, said the properties were about 60 percent leased when Normandy took over daily management in March. With Newmark Knight Frank’s Brian Carcaterra as Normandy’s exclusive leasing agent and a roughly 12-member Normandy staff making quick decisions from the company’s office at 707 Westchester Ave., the new landlord has done close to 200,000 square feet in leasing through September. Renewals accounted for about two-thirds of  that. That total square footage is from one-third to nearly 39 percent of leasing activity for class-A office space in the county through the first three quarters of 2009, based on third-quarter market reports from CB Richard Ellis and Cushman and Wakefield.

 

Normandy’s May signing of WESTMED Medical Group, formerly the Westchester Medical Group, to 31,662 square feet of space at 2700 Westchester Ave. in Purchase as the expanding group’s new headquarters was the sixth largest deal in the county this year, according to CB Richard Ellis.

 

“We are still moving the needle in terms of occupancy,” Teti said. “We’ve moved the needle about 5 percent.”

 

Trevisan said Normandy has four major submarkets in metropolitan Washington, Greater Boston, the New York tristate area and California. “In terms of the activity over the past six months, I would say that Westchester has probably been more on the higher end of activity compared to the rest of the portfolio,” he said.

 

Trevisan said Normandy’s record as “a stable landlord” makes tenants “more inclined to do a deal than at a building that has turnaround. That has worked in our favor at Westchester. That could be a cause of some of the activity at The Exchange.”

 

“Tenants right now, it’s an uncertain time in the economy,” Teti said. “As landlords, we’re trying to be understanding with our tenants,” taking back space from some companies in exchange for long-term renewals, for example, and writing expansion rights into leases to allow tenants to grow into space over time. “Being flexible is very important in this environment.”

 

“As landlord you can’t take your eye off the ball for a moment or there’s a good chance you’ll lose the deal right now,” Trevisan said.

 

“I think we’re going to see more of the same in 2010,” Teti said. “We think  we’re going to have to continue to do the things we’ve been doing to attract tenants. Most of the tenants we’re trying to attract are already in Westchester.”

After stabilizing near-term lease expirations, Normandy wants to attract new activity at The Exchange. That “is a work in progress,” Teti said.

 

“If we can move the needle 10 percent, that’s a big move in this environment.”

 

Along Westchester Avenue, Normandy is about halfway there.