The 10 biggest NYC real estate finance deals of 2015

Stuy Town heads the pack, but refinancings dominate

TRD New York /
Dec.December 22, 2015 03:30 PM

UPDATED, 2:12 p.m., Dec. 23: New York’s investment sales market continued to soar in 2015, bolstered by an enthusiastic lending environment. While many of the biggest loans made were for trophy acquisitions, it was also a year for refinancings, with many property owners taking advantage of the wide availability of debt and the rising market to cash out.

As the year draws to a close, The Real Deal, with data from analytics firm CrediFi, took a look at the 10 biggest real estate financing deals in New York’s market, which together represented more than $11 billion in debt. Note: the ranking does not include construction loans.

1.  Stuyvesant Town-Peter Cooper Village, $2.7 Billion

Borrower: The Blackstone Group, Ivanhoe Cambridge

Lender: Fannie Mae via Wells Fargo

No question: $2.7 billion is a huge sum to lend on a single property. But it’s only represents about 50 percent of the $5.3 billion-plus the Blackstone Group and Ivanhoe Cambridge paid for the complex, in a deal that closed Friday. The buyers paid for the remainder with their own equity, a far cry from 2006, when Tishman Speyer and BlackRock financed their acquisition of Stuy Town with mountains of debt. Wells Fargo originated the loan for Blackstone and Ivanhoe Cambridge and will pass it on to Fannie Mae, which will sell it off as commercial mortgage-backed securities (CMBS) stamped with its guarantee.

2.  200 Park Avenue (a.k.a. MetLife Building), $1.4 billion

Borrower: Tishman Speyer, Irvine Company

Lender: Bank of America, Wells Fargo, others

The MetLife Building has long been one of the most valuable buildings in the country, and its price has only appreciated during the current market boom. This made refinancing a no-brainer. Tishman Speyer is often referred to as the owner, but according to Bloomberg the firm holds only a tiny stake in the 3 million-square-foot Midtown tower. Irvine Company, the firm of California billionaire Donald Bren, holds a 97.3 percent stake in the property. In March, the owners consolidated the debt on the tower by taking out a new $1.4 billion loan from a syndicate led by Wells Fargo and Bank of America. The deal valued the tower at $3 billion.

3.  1095 Sixth Avenue (a.k.a. 3 Bryant Park), $1.125 billion

Borrower: Ivanhoe Cambridge

Lender: German American Capital Corporation

It’s been a big year for Ivanhoe Cambridge, a Canadian investment firm that isn’t into chest-thumping but has become one of New York’s most active commercial investors. Months before it pulled of the biggest single-asset real estate deal since 2006 in partnership with Blackstone (Stuy Town), it dished out $2.2 billion for 1095 Sixth Avenue, a 1.2 million-square-foot office tower overlooking Bryant Park. Incidentally, the seller was Blackstone. Over the past five years, the real estate investment arm of Quebec’s public pension fund manager has bought more than $9.2 billion worth of Manhattan properties, according to Real Capital Analytics — more than real estate giants like Related Companies, Brookfield Properties or American Realty Capital. Ivanhoe financed this acquisition with a $1.1 billion CMBS loan from German American Capital Corporation, a subsidiary of Deutsche Bank.

4.  11 Madison Avenue, $1.075 billion

Borrower: SL Green Realty

Lender: Deutsche Bankn

The $2.2 billion deal for 1095 Sixth briefly looked like it could be the biggest deal for a New York office tower in 2015, but its record was eclipsed in August when SL Green Realty paid the Sapir Organization and CIM Group $2.6 billion for 11 Madison Avenue, a 2.3 million-square-foot Art Deco office tower overlooking Madison Square Park. The deal was notable for two reasons. It was the largest single-building deal in New York’s history (the GM Building was valued higher when it sold to Boston Properties in 2008, but the buyer paid less in cash because of the property’s exorbitant debt, and it was part of a three-building package), and it was located outside of Midtown Manhattan’s core office district. Still, SL Green has argued that the deal was a bargain because the cap rate is higher than for many Manhattan office buildings currently trading at lower price points. The firm has gone on a selling spree to fund the deal, raking in $1.7 billion in the third quarter alone. The deal’s debt portion was funded by German American Capital Corporation, again in a CMBS deal.

5.  1211 Sixth Avenue, $1.035 billion

Borrower: Ivanhoe Cambridge

Lender: Morgan Stanley, Citibank, others

The nearly 2 million-square-foot tower at 1211 Sixth Avenue is likely to lose its biggest tenant, News Corp., to Silverstein’s Two World Trade Center, but at least it has its financing sorted out. In July, Ivanhoe Cambridge refinanced the 45-story building with a $1.035 billion loan from a syndicate led by Morgan Stanley and Citibank.

6.  730 Fifth Avenue, $1 billion

Borrower: Jeff Sutton, General Growth Properties

When Jeff Sutton and General Growth Properties dished out $1.75 billion, or $4,490 per square foot, for the Crown Building at Fifth Avenue and 57th Street, they set a new record: No one had ever paid more for an entire office building on a per-square-foot basis. The high price didn’t deter Deutsche Bank from financing the deal with a $1 billion loan, which closed in April.

7.  208 East 64th Street, $897 million

Borrower: Lenox Hill Hospital

Lender: Bank of New York Mellon

 In June, the Lenox Hill Hospital at 208 East 64th Street refinanced its property with $897 million from Bank of New York Mellon, modifying an existing set of guaranteed bonds against the property.

8.  230 Park Avenue (a.k.a the Helmsley Building), $785 million

Borrower: RXR Realty, The Blackstone Group

Lender: American General Life Insurance Company, The Variable Annuity Life Insurance Company, National Union Fire Insurance Company of Pittsburgh, AIG Property Casualty Company c/o AIG Investments

Scott Rechler’s RXR Realty and minority partner Blackstone paid $1.2 billion for the Helmsley Building at 230 Park Avenue in May. The partners bought the 1.4 million-square-foot, 34-story office building located just north of Grand Central Terminal from a partnership between Invesco, Monday Properties and South Korea’s Pension Service. A group of insurance firms financed the deal with a $785 million loan, which closed in May.

9. 590 Madison Avenue, $650 million

Borrower: State Teachers Retirement System of Ohio

Lender: Goldman Sachs

When the State Teachers Retirement System of Ohio refinanced its 42-story office tower 590 Madison Avenue in October, it went with a familiar lender: Goldman Sachs. The Wall Street bank had last financed the property in 2007, with a $350 million loan. By 2015, the tower’s value had soared, and the pension fund was able to get $650 million, reportedly valuing the building at more than $1.5 billion. Edward Minskoff, who developed 590 Madison in 1983, still handles rentals there.

10.  Brookfield Place, $600 million

Borrower: Brookfield Office Properties

Lender: Metropolitan Life Insurance Company, New York Life Insurance Company, The Prudential Insurance Company of America, AXA Equitable Life Insurance Company

As Manhattan property values soar, owners can extract more and more value from their buildings by refinancing them. This is exactly what happened at Brookfield Place, the sprawling office complex in Lower Manhattan once known as World Financial Center. In October, Brookfield took out a $600 million mortgage on the property from four insurance firms. The loan replaced a $325 million loan from Deutsche Bank, according to the New York Observer.

Correction: A previous version of this story incorrectly omitted the 590 Madison loan. 

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