Boston Properties lands $2.3B loan for GM Building

Boston Properties has reached a deal to refinance the GM Building with a $2.3 billion mortgage from a group of unidentified lenders, the real estate investment trust announced during an earnings call Wednesday.

The 10-year loan, which carries a 3.43 percent fixed interest rate, replaces a $1.6 billion package of senior and mezzanine financing with a 6 percent interest rate that expires in October. Boston Properties’ CFO Michael LaBelle said he expects the new loan to close in June and save the company $9 million in interest payments per year compared to the old mortgage.

Boston Properties [TRDataCustom] bought the 1.8 million-square-foot Midtown office tower at 767 Fifth Avenue for $2.9 billion in 2008 from Harry Macklowe. One of the property’s biggest tenants, Estee Lauder, has a 300,000-square-foot lease expiring in 2020 and Boston Properties’ president Douglas Linde said during the call that he does “not think they have made a decision yet” over whether to renew the lease or move.

The new mortgage is one of the largest commercial real estate loans ever recorded for a single building. It is also the largest mortgage the New York market has seen since Blackstone Group and Ivanhoe Cambridge borrowed $2.7 billion from Wells Fargo to finance their $5.3 billion acquisition of the Stuyvesant Town-Peter Cooper Village housing complex in late 2015.

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