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Canada Pension Plan joins Oxford on St. John’s Terminal megaproject

Deutsche provided $400M financing to the partnership

From left: Renderings of St. John's Terminal, CPP CEO Mark Machin and Oxford Properties' Blake Hutcheson
From left: Renderings of St. John's Terminal, CPP CEO Mark Machin and Oxford Properties' Blake Hutcheson

Oxford Properties Group has brought on Canada Pension Plan as an equity partner for the office and retail portion of the massive St. John’s Terminal site.

The firms closed on the $700 million purchase of the south site Wednesday, bringing the site’s total capitalization of $1.3 billion. Canada Pension Plan, also known as CPP, has taken a 47.5 percent stake in the south site, which offers 1.3 million square feet for commercial development, the firms announced.

The mixed-use complex, located at 550 Washington Street, is slated to have 1,500 rental apartments as well as office and retail across a three-block-site site.

The sellers, Westbrook Partners and Atlas Capital Group, continue to own the north site and plan to develop 400,000 square feet of residential space.

Deutsche Bank provided $400 million in new financing to Oxford and CPP, sources told The Real Deal.

Oxford, which has yet to develop any projects solo, signed a contract by itself to buy office and retail development rights for $700 million in September, the New York Post reported at the time.

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Cushman & Wakefield’s Adam Spies and Doug Harmon brokered the sale and brought in the joint-venture partner, and a team led by Steve Kohn brokered the loan. CBRE’s Paul Amrich was hired to handle office leasing at the south site, sources said.

The buyers could not be immediately reached for comment, and the brokers declined to speak.

Other bidders vying for the site included Brookfield Property Partners, Vornado Realty Trust and RXR Realty.

The overall St. John’s Terminal site has traded hands among several major investors this market cycle, but the redevelopment is still far off. Fortress Investment Group and Atlas Capital Group acquired the property for $540.8 million in 2012. Westbrook then took a majority stake through two acquisitions totaling $450 million in 2013 and 2015. Atlas Capital Group stayed on in a minority position.

The City Council approved the redevelopment in December 2016, after two years of negotiations between the developers, the Hudson River Park Trust and local politicians. The city allowed the developers of the Terminal to skip the mandatory inclusionary housing requirement as a result of its $100 million investment in Hudson River Park. That investment bought the firms 200,000 square feet of development rights.

In April 2017, the developers secured $300 million in refinancing from Morgan Stanley, replacing a loan for the same amount, records show. At the same time, they closed on the $100 million purchase of development rights from the trust.

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