The new debt replaces the original building loan, also worth $1.4 billion, which had been securitized in two pieces.
Public records show RXR Realty refinanced $782M of that existing loan at the address, the headquarters of the Ernst & Young accounting firm. But a source who spoke with the Commercial Observer said there is an additional $618 million in mezzanine financing on the way, bringing the package up to the reported total. Earlier this month, Real Estate Alert reported that Morgan Stanley planned to originate a $1.4 billion in debt for the building.
RXR owns a 50 percent stake in the Kohn Pedersen Fox-designed tower, while investor David Werner, who bought the building in 2014 for $1.5 billion, owns the other half. RXR provided Werner and his partner a $150 million mezzanine loan at the time of the 2014 acquisition deal, and then last year paid $800 million to acquire a controlling 50 percent stake in the property.
Morgan Stanley will hold the senior debt on the new financing and is in the process of syndicating out subordinate pieces, according to Commercial Observer. According to data from Trepp, the two outstanding CMBS loans came due on March 11 and payments are current. There were no brokers on the refinancing, according to Commercial Observer.
Ernst & Young, 5 Times Square’s anchor tenant, occupies more than 90 percent of the building. A Red Lobster restaurant occupies the base of the building.