Jeff Sutton lands $90M refi for Madison Ave Gold Coast property

Balloon payment of $90M principal now staved off until 2022

TRD New York /
Jun.June 20, 2019 12:16 PM
Jeff Sutton and 747 Madison (Credit: Google Maps)

Jeff Sutton and 747 Madison (Credit: Google Maps)

A month after a $90 million balloon payment was set to come due, Jeff Sutton’s Wharton Properties has refinanced the retail space at 747 Madison Avenue for three more years.

The retail magnate secured a $90 million refinancing package from JP Morgan Chase for the property, currently home to Givenchy and Alexander McQueen, according to Tel Aviv Stock Exchange filings and New York City property records. The new debt replaces a previous loan from Goldman Sachs for the same amount, which was provided in 2014.

Representatives for Wharton did not immediately respond to requests for comment. JP Morgan Chase declined to comment.

Wharton currently values the property at $250 million, according to Tel Aviv Stock Exchange filings.

Like the Goldman loan it is replacing, the refinancing from JP Morgan is a balloon mortgage with the entire principal due at maturity, now set for 2022. The prior debt had an initial three-year term with two one-year extension options, both of which were exercised, bringing the final maturity date to May 9 this year. The new loan does not have extension options.

Last month, Wharton notified Israeli bondholders that it had secured a one-month extension to the Goldman loan, as it was in the process of arranging a refinancing. The loan was then extended by one more week to Tuesday, when the new JP Morgan mortgage came into effect.

Sutton and partners SL Green Realty and Harel Insurance picked up the ground-floor retail space at the Colony House co-op building for $66.25 million in 2011, as then-tenant Valentino was nearing the end of a 10-year lease. The partners then picked up a second-floor duplex unit for $2.6 million the following year, and merged it with the ground floor unit to create a second high-ceilinged storefront.

In 2013, Sutton bought out SL Green and Harel’s respective one-third stakes in a deal that valued the property at about $160 million. Givenchy and McQueen both signed 15-year leases at the property that year.

In conjunction with SL Green’s sale of its stake, the company made a $30 million preferred equity investment in the property, which Sutton bought out in 2017 using proceeds of a $100 million bond raise in Tel Aviv.

The new loan from JP Morgan comes with somewhat more favorable interest rates than the debt it is replacing – LIBOR plus 1.25 percent (3.64 percent at present), versus LIBOR plus 1.75 percent on the Goldman loan. As a personal guarantor of the loan, Sutton is required to maintain a net worth of at least $2 billion. Forbes currently estimates his net worth to be $4.3 billion.


Related Articles

arrow_forward_ios
With a cooling trade war, stocks perform well, including real estate. (Credit: iStock)

Real estate stocks push up this week as U.S.-China trade tensions ease

Real estate stocks push up this week as U.S.-China trade tensions ease
416 West 25th Street and Maverick Real Estate Partners principal David Aviram (Credit: Google Maps and LinkedIn)

Chelsea landlord claims “predatory” lender is charging a crippling interest rate as punishment after losing foreclosure case

Chelsea landlord claims “predatory” lender is charging a crippling interest rate as punishment after losing foreclosure case
Craig Solomon

The REInterview: Square Mile’s Craig Solomon on his big bet on studio space, today’s capital stack and the dangers of socialism

The REInterview: Square Mile’s Craig Solomon on his big bet on studio space, today’s capital stack and the dangers of socialism
529 Fifth Avenue and Silverstein Properties' Larry Silverstein (Google Maps; Getty)

Silverstein gets $171M refi for 529 Fifth Avenue

Silverstein gets $171M refi for 529 Fifth Avenue
Lantern Real Estate co-founder Tal Bar-Or and a rendering of the project

Williamsburg building gets $41M bridge loan after Brooklyn Boulders bails

Williamsburg building gets $41M bridge loan after Brooklyn Boulders bails
AIG CEO Brian Duperreault and Brooklyn Navy Yard project, with Andrew Joblon and 980 East 149th Street (Turnbridge, Brooklyn Navy Yard)

These were the top outer-borough loans in September

These were the top outer-borough loans in September
From left: 410 Tenth Avenue, 745 Fifth Avenue, One Manhattan West and 522 Fifth Avenue (Google Maps, Wikimedia)

Real estate lending bounces back in September in a big way

Real estate lending bounces back in September in a big way
The pandemic is leading to huge losses in value for hotels, malls and other commercial properties (iStock)

Troubled commercial properties see values fall 27%: report

Troubled commercial properties see values fall 27%: report
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...