Empire State Realty Trust now has access to a lot more capital

$1.4B credit facility includes option to increase borrowing

TRD New York /
Sep.September 05, 2017 01:45 PM

Anthony Malkin and the Empire State Building (Credit: Getty Images)

Maybe it’s time to buy some buildings again? Empire State Realty Trust landed a new $1.365 billion credit facility from a consortium of banks with an option to increase it to $1.75 billion, the real estate investment trust announced Tuesday.

The financing package includes a $1.1 billion revolving credit facility and a $265 million term loan. Merrill Lynch, Wells Fargo, Pierce, Fenner & Smith, Capital One, Goldman Sachs, JPMorgan Chase and Barclays Bank participated in the facility, among other lenders.

The new facility replaces a previous facility of the same amount that was set to expire in January 2019 and comes with slightly lower interest rates (1.2 percentage points over the Libor benchmark rate for the term loan, compared to 1.6 under the old deal). The credit facility runs through August 2021 and can be extended by six months and the term loan through August 2022.

The new facility gives Empire State access to plenty of capital should it chose to buy again. The owner of the Empire State Building hasn’t bought a major property since 2014, but earlier this year the firm’s COO John Kessler said it is considering acquisitions. “We continue to pursue off-market opportunities,” he said during an earnings call.

Empire State isn’t the first Manhattan landlord to take advantage of low interest rates this year. In July, the Durst Organization landed a $1 billion financing package from a group of banks, including a $400 million credit facility.

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