The Real Deal New York

STRS Ohio takes out $650M on 590 Madison Avenue

Former IBM building owner chooses refinancing over selling equity

October 05, 2015 09:00AM

590 Madison Avenue

590 Madison Avenue in Midtown

The State Teachers Retirement System of Ohio wants 590 Madison Avenue all to itself.

The pension fund chose to refinance its mortgage on the former IBM building rather than selling a minority stake, securing a fixed-rate $650 million loan from Goldman Sachs Mortgage Co.

Cushman & Wakefield represented STRS Ohio in the deal.

The fund had initially sought to sell a 49 percent equity stake in the Midtown office tower, then valued at $1.5 billion, reportedly entering into discussions with the Safra family. But the owner changed tack in April, opting to pursue a loan instead.

The loan will be take advantage of low borrowing rates to retire a previous $350 million mortgage on the property, taken out in 2007, according to the Wall Street Journal. [WSJ]Ariel Stulberg