Apollo affiliate backs $74.5M Stamford office-to-condo conversion

An Apollo Global Management affiliate is backing Sun Homes and Hudson Bay Capital’s $74.5 million acquisition and conversion of The Caspian, a seven-story waterfront office building on Long Island Sound’s Shippan Point, into 63 condominium residences. According to Institutional Real Estate Inc., Walker & Dunlop’s Capital Markets Institutional Advisory arranged the financing.

The project remakes 241,000 square feet into one-, two- and three-bedroom homes plus townhomes, with a grand lobby, indoor and outdoor amenity space, private rooftop terraces, a 57-slip marina and structured parking on 1.38 acres within reach of Metro-North service to Manhattan. The financing dates to Aug. 19, and the deal priced at roughly $1.18 million per residence, per prior coverage.

That number sizes the debt to a completed-condo exit, not a lease-up office loan with a reversion cap at the back. The collateral is still an office tower, but its highest and best use has stopped being office.

Office has moved from mark-to-market to trade-to-trade, with clearing prices set by buyers willing to underwrite a different use. The Caspian is that kind of trade, and it carries the refinancing-wall corollary: mature office debt is being resolved less by distressed auctions and more by conversion-and-redevelopment capital that reprices risk inside the project budget and the sales plan, not on the courthouse steps.

None of that makes the 63 units easy to sell, and a marina and rooftop terraces add cost; the loan’s exit is a string of individual balance-sheet decisions by condo buyers. For Apollo, the office income stream gets replaced by a residential closing schedule.