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April 8, 2007 But instead of purchasing an imaginary Boardwalk or Park Place with Monopoly money, Antares is buying real real estate for hundreds of millions - even billions - of real U.S. dollars. Antares acquired a Westport hotel and five retail/office buildings for $19.85 million in December, bought the UST Inc. headquarters in Greenwich for $136.7 million last month, and plans to buy houses and old factories on 5 prime acres near the Stamford train station this summer for an undisclosed price. The privately held firm bought 466 apartments for $223 million in Greenwich about a year ago in what was believed to be the priciest real estate deal in Connecticut history. Antares is converting 396 of the units into luxury condominiums and expects to invest another $125 million in renovations at Greenwich Place and Greenwich Oaks. Founded by two former prep school buddies in 1996, the firm also is embarking on a $3 billion-plus redevelopment of more than 82 acres in Stamford's South End. How do they keep buying and developing at that pace? Teamwork is the answer, said Antares' co-founders James Cabrera and Joseph Beninati. Of course, it helps that their team includes Greenwich-based Arch Street Capital, Lubert-Adler Partners, Capital One/Northfork, Credit Suisse, General Electric Co., Goldman Sachs, Lehman Brothers, Morgan Stanley, RBS Greenwich Capital and Wells Fargo, some of the world's largest and most prestigious financial institutions. These firms and other investors loan money to or become equity partners of Antares Investment Partners, said Beninati, who holds the title of managing partner, along with Cabrera. Big-stakes partners Lubert-Adler is a real estate private equity firm that focuses on redevelopment projects nationwide through joint ventures with local operating partners. Founded in 1997 by Ira Lubert and Dean Adler, the firm has invested in more than $20 billion worth of real estate with the help of its own deep-pockets team, including the endowments of Harvard, Yale and Princeton universities and several pension funds. Real estate development is a big-stakes game, and Antares can't do it without capital partners like Lubert-Adler. For the costly South End project, infrastructure upgrades such as new streets and walkways, improvements to gas and sewer lines, sidewalks and storm drains will run about $180 million, Antares officials told city planners last month. Another $20 million is needed to widen and deepen the Atlantic Street underpass beneath the Metro-North Railroad tracks, which the city and Antares have said will connect the new development to downtown. The city is seeking state and federal money for the project and plans to contribute about $1.2 million. With the project still on the drawing boards, Antares last year
took a $103 million loan from Goldman Sachs Commercial Mortgage
Capital of New York and RBS Greenwich Capital to repay existing
debt and fund its predevelopment expenses for the South End, where
it has proposed to redevelop about a third of the land in the 250-acre
neighborhood. Credit, credibility In their place, Antares plans to build 4,000 new housing units, 400,000 square feet of retail space, offices, two hotels and more than 10 acres of new parkland and waterfront trails over 10 years. The firm expects its stake in the area to grow as it buys more property. Pending regulatory approvals, the Harbor Point District would be one of the largest waterfront redevelopment projects in the nation. The endeavor has given Antares financial credibility, Beninati said. "The South End project validated us as a firm that is capable of doing multibillion-dollar projects," Beninati said. Real estate insiders have begun to mention Antares in the same breath as marquee firms such as Tishman Speyer, the successful and aggressive buyer that owns Rockefeller Center, the Chrysler and MetLife buildings and other Manhattan landmarks. Last year, Tishman Speyer and partners bought New York City's Stuyvesant Town and Peter Cooper Village apartment complexes for $5.4 billion. "A good, quality firm can execute multiple transactions in a relatively short time," said Jeffrey Dunne, a vice chairman at the Stamford office of Los Angeles-based CB Richard Ellis commercial real estate. "Antares has shown to be fairly smart at what they do. If they have the right strategy and the right people, they will be fine." 'Game plan' "I certainly don't think Antares is going too fast in the South End. They show a true commitment to the area," said Rick Redniss, president of Redniss & Mead Inc., which provides planning, environmental, surveying and engineering services to developers. "I have worked with a lot of people in the South End and they are happy that things finally are going to really happen there," Redniss said. Jim Millard, managing director of Stamford-based Core Plus Properties LLC, also expressed faith in Antares. "They have assembled an extremely capable executive team to execute all that they have taken on," Millard said. "They are too wise and too sensitive to their investors - who are bright people - to not have a full and comprehensive game plan on which to execute." Antares has earned the accolades, said Beninati. "Firms like Goldman Sachs do business with Antares for these several reasons. The Antares partners have decades of experience. We are well-capitalized. We stand by our projects in up and down markets. We have long lists of references," he said. Making calls "We have a capital markets group internally whose full-time job is to access the debt and equity capital markets to finance our transactions," Beninati said. The capital markets group employs five people at 333 Ludlow St., also known as Stamford Harbor Park. Antares' investment headquarters is at 52 Mason St. in Greenwich. At such high levels of financing, getting the money is never a slam-dunk. Sometimes, a debt partner, such as a bank, will deny Antares a loan. Other times, Antares has to turn down a lender. "In every deal we do, lenders decide if that project is for them," Beninati said. "But over the years, the opposite problem has arisen. Several banks might agree to finance our projects, and we regularly have to call some of our oldest and dearest friends in the industry tell them that Antares cannot give them business on a particular deal." One old financial friend whose name comes up regularly with Antares is Goldman Sachs, which not only participated in the Stamford South End loan, but also became an equity partner for the UST building purchase. High rents "People were scratching their heads when Antares bought Pickwick Plaza," said Jim Fagan, senior managing director of the Connecticut and Westchester County, N.Y., operations of New York City-based Cushman & Wakefield Inc. "When they sold it for more than double what they paid for it, people stopped scratching their heads." "It appears Antares' strategy has involved investing in buildings with hidden value and unlocking that value," Fagan said. Beninati said that is exactly Antares' mantra. "We buy things that need re-leasing or repositioning, or need to be reconstructed," he said. "We like getting our hands dirty, which is why our strategy is locally focused. We want to be close to our assets." Branching out The firm's holdings also include Stonington Commons, a residential project on the waterfront near the Rhode Island border; Armonk Square, a retail and residential redevelopment in Armonk, N.Y.; and the Cider Mill single-family home development in Armonk. In Backcountry Greenwich, Antares is building four 10,000-square-foot, multimillion-dollar mansions off Round Hill Road in its Lake Carrington Estates development, and several 15,000- to 20,000-square-foot mansions in its Taconic Estates project in the northeast corner of town. The company is marketing its Greenwich Place and Greenwich Oaks condos at prices that range from $600,000 to $1.8 million. The average price for condos is $944,000 townwide. Antares took a $315 million loan from Lehman Brothers last year to finance the condo effort. The project stirred potentially costly controversy. Current residents of the properties, formerly named Putnam Green and Weaver's Hill, are suing Antares. They say the developer flouted state laws on condo conversions, unfairly raised the rents of senior citizens and improperly tried to evict tenants by putting their health and safety at risk. As of March 31, some tenants had settled with Antares. About 100 other tenants, most of whom are senior citizens, remain in litigation over proposed rent increases. State law allows tenants 62 and older to continue renting units in a condo conversion for life. Antares has disputed the claims. Its officials view the condo endeavor in a more altruistic way. "Our entire goal of the Greenwich Oaks and Greenwich Place projects was to finally make Greenwich more affordable and more attainable for people who aren't hedge fund guys or Wall Street moguls," Beninati said. The two Antares partners live in Greenwich, where the average price of a single-family house was $2.66 million last year. Looking for more "We are interested in everything in the South End," Cabrera said. Antares' aggressive acquisitiveness aside, Beninati said the firm doesn't bite off more than it can chew. He believes Antares will not go bust like a few developers who overbuilt during boom times in the 1980s, only to see Stamford's high-rises sit largely unoccupied when recession hit at the end of the decade. "The capital markets work differently today," he said. "Risk is allocated in a more dispersed manner and no one bet at Antares can make or break the firm. We purposely diversify to manage this risk." "If they are reasonably well-capitalized and their partners are well-capitalized, they are able to weather a downturn," CBRE's Dunne said of Antares. Close to home Beninati graduated from Middlebury College in Vermont in 1987. Cabrera received a bachelor's degree from Duke University, where he was an All-America lacrosse player, that same year. The pair co-founded Antares in 1996 and Greenwich Technology Partners, a provider of computer network engineering and consulting services, a year later. Cabrera was in charge of marketing and sales and Beninati was chairman and chief executive officer of the company, which had been in Stamford and later moved to Greenwich. Cabrera also had been a regional president of the former Galbreath real estate firm. In 2002, they sold Greenwich Technology Partners, now based in White Plains , N.Y., to concentrate on real estate development. Antares had a major growth spurt in 2004, when it bought ownership stakes in an office building at 70 Seaview Ave. in Stamford, the Delamar Greenwich Harbor hotel and Stonington Common from Stamford developer Seth Weinstein. Beninati and Cabrera were Antares' sole employees when they started the company in a small office on Railroad Avenue in Greenwich. Today, the company has 325 employees. Even at the start, the pair had a panoramic vision of future growth. "Jim walked me around the Stamford waterfront and the South End about 10 or 11 years ago," Beninati recalled. "He said, 'You have to see it. It's a great piece of property.' I remember the day like it was yesterday because it was freezing cold. Jim said, 'We have to figure something out here.' "
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