NYC trophy buildings find refinancing, secondary markets suffer

Jan.January 24, 2012 04:30 PM

Banks and insurance companies are avoiding secondary U.S. markets and directing their refinancing funds to a select group of borrowers in urban centers as mortgages from the real estate boom begin to mature, Bloomberg News reported.

More than 50 percent of the $19 billion in commercial property loans set to mature this year may fail to find refinancing, according to data from Standard & Poor’s, but those in New York City like 350 Park Avenue have the best chance, Bloomberg said.

“Having a New York City trophy asset in a [commercial mortgage-backed securities] deal, if it is a true trophy, generally is a positive for investors,” said Julia Tcherkassova, a commercial mortgage bond analyst at Barclays Capital. Outside of major metropolitan areas “there are going to be fewer competitors bidding and when the buildings lose tenants it’s difficult to replace them.”

There may even be some competition when it comes to refinancing the city’s most prestigious towers.

Harris Trifon, global head of commercial real estate debt research at Deutsche Bank, added: “There is a long line of people who are willing and able to recapitalize trophy assets.”

One example of a trophy property that just got refinanced is 350 Park Avenue. Vornado Realty Trust just got $300 million from New York Community Bank to refinance the property, it was recently reported. [Bloomberg]

Related Articles

The nation’s biggest lenders are anticipating a bumper year of refinancing and new home loans (Credit: iStock)

“If you’re not making $1M this year as a loan officer, you’re grossly incompetent:” Mortgage lenders sense a new gold rush

980 Avenue of the Americas and Vanbarton Group's Richard Coles and Gary Tischler (Credit: Google Maps)

Vanbarton Group scores $240M Blackstone refi for 980 6th Avenue

The Eugene at 435 West 31st Street and Brookfield's Ric Clark (Credit: StreetEasy and Brookfield)

Brookfield scores $479M refi on Manhattan West resi tower

180 Maiden Lane with Clarion Partners CEO David Gilbert (red) and MHP Real Estate Services CEO David Sturner (blue) (Credit: Google Maps, Clarion, MHP)

Clarion Partners group lands $372M refi on FiDI tower

New York Life building gets $410M refi

New York Life building gets $410M refi

461 West 34th Street with Marx Development Group's David Marx (Credit: Google Maps)

David Marx lands $202M refi for Hudson Yards hotel

70 Pine Street and Goldman Sachs chairman Lloyd Blankfein (Credit: Wikipedia and Getty Images)

Goldman Sachs refis Art Deco apartment conversion at 70 Pine with $386M loan

329 Broadway and JLJ CEO Jonathan Lewis (Credit: Syndicate Architecture via CityRealty, Google Maps)

Williamsburg developer lands $57M refi to complete 329 Broadway