The Real Deal New York

New CMBS issuance in June hit $3.4B in
New York

Three single-asset deals comprised $2.2B
By Chava Gourarie | July 14, 2017 05:20PM

Clockwise from top left: The GM Building, the Mark Hotel and 731 Lexington Avenue (Credit: Macklowe, Twitter and Vornado)

June was an active month for New York’s CMBS market, topping the year for total new issuance and number of collateralized properties.

A total of $3.4 billion in new commercial mortgage-backed securities was issued in June, bringing the total market in to $59.3 billion, according to Trepp data prepared for The Real Deal.

The delinquency rate for CMBS loans ticked up slightly to 0.56 percent in New York, alongside the the national delinquency rate, which continued its upward trend to 5.75 percent, the highest it has been since December 2014.

Three single-asset deals comprised more than half of the new issuance in New York, with a total of $2.2 billion backed by the 50-story GM Building, Vornado Realty Trust’s Bloomberg Tower, and the Mark Hotel.

In June, Boston Properties refinanced the GM Building, home of the Apple cube, with a $2.3 billion interest-only mortgage from Morgan Stanley with a fixed interest rate of 3.43 percent, replacing a $1.6 billion financing package with an interest rate of 6 percent. A $1.5 billion slice of that was securitized in a 10-year deal, with the property awarded a 47.9 percent loan-to-value ratio.

Also in June, Vornado refinanced the Bloomberg Tower at 731 Lexington Avenue with a $500 million mortgage with a 2 percent floating interest rate. It was then securitized by Deutsche Bank into a three-year CMBS conduit with a 34.5 percent LTV.

The remaining $1.2 billion in new issuance was spread across eight deals, backed by 42 properties, including 245 Park Avenue, 85 Broad Street and the Yeshiva University portfolio.

“Having so much issuance to end the quarter is a good sign,” said Sean Barrie of Trepp. “The market’s been warming up more and more, and it looks like new issuance will remain pretty warm through July.”