New York real estate magnate Stephen M. Ross has been cutting deals at a whirlwind pace in recent weeks.
Centerline Holding Company, which he chairs, today announced that Freddie Mac would securitize its $2.8 billion bond portfolio. Centerline said it would also receive a $131 million investment in January from the Related Cos.
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Centerline execs said the moves were designed to reduce debt, attract capital for growth and shelter the firm from volatile interest rates.
Yet several stockholders participating in the company’s online conference call this morning described the arrangement as a sweetheart deal benefitting Ross and his companies at the expense of public shareholders.
Ross also chairs Related Cos. Jeff T. Blau, Related’s president, is a managing trustee of Centerline. A third Centerline trustee, Robert J. Dolan, is dean of the Stephen M. Ross School of Business, named for its prime benefactor.
Related had a large cash infusion earlier this month, when several firms invested a total $1.4 billion. Mubadala Development Co. of Abu Dhabi and the Olayan Group of Saudi Arabia put in about $1 billion. Goldman Sachs and Michael Dell’s investment company, MSD Capital, invested an additional $400 million for a 7.5% stake, placing Related’s value at more than $5 billion.
Ross told the Wall Street Journal that Related opened talks for the cash infusion before the mortgage crisis erupted. The market “was so good we knew it wouldn’t last,” he said.
Ross formed Related 25 years ago to develop and manage government-assisted rental apartments. Over the last two decades, the company has become heavily involved in luxury residential and commercial projects, including Manhattan’s Time Warner Center.
Related is also developing properties around Penn Station, and is bidding on a massive project to redevelop the Hudson Yards on the city’s west side.
On another front, the Miami Herald reported two weeks ago that Ross and Jorge Perez were talking to Wayne Huizenga about buying the Miami Dolphins. Perez is the managing general partner of Related’s Florida operations.
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