Michael Shvo seeking $600M to refinance Coca-Cola Building

Shvo, Biligili and partners paid $937M for 711 Fifth in September

Nov.November 21, 2019 12:44 PM
Michael Shvo with 711 5th Avenue (Credit: Getty Images, and Google Maps)

Michael Shvo with 711 5th Avenue (Credit: Getty Images, and Google Maps)

Two months after acquiring the Coca-Cola building, a partnership led by Michael Shvo is looking to refinance the nearly $1 billion property.

Shvo and partners Turkish firm Biligili Holdings, Deutsche Finance Group and pension fund BVK, acquired the building at 711 Fifth Avenue in September for $937 million.

The group is searching for between $500 million and $600 million in debt, people familiar with the matter told The Real Deal. That would partially replace a $700 million, six-month bridge loan JPMorgan Chase provided for the acquisition.

The search for financing follows a tumultuous saga at the building. Coca-Cola rejected Shvo’s bid earlier this year, and instead went with a lower offer. In a surprising twist, the lower bidder turned around and sold the property at a higher price to Shvo’s team.

The transaction was the subject of a report last month by TRD, which examined how Coca-Cola left millions of dollars on the table, what advice it was given by brokerage Cushman & Wakefield — which advised multiple parties in the deal — and whether Coca-Cola breached its fiduciary duty to shareholders.

The iconic property had been owned by the Coca-Cola since the 1980s, when it acquired the building as part of its takeover of Columbia Pictures. Almost a century ago, it was home to NBC, and has since held high-profile tenants including boutique investment bank Allen & Company, which remains in the building.

The beverage giant put the building on the market last year, and received two serious bids: one from Shvo’s partnership at $955 million, and another valued at $907 million from a group led by Nightingale Properties and a subsidiary of Kuwait’s sovereign wealth fund, Wafra Capital Partners.

Coca Cola went with the lower bid. But after Nightingale’s debt partner walked from the deal in June, Nightingale sued Coca-Cola in an attempt to abandon the contract.

Within two months, the lawsuit was dropped, and Nightingale secured a $700 million bridge loan from JPMorgan to close the sale.

However, a week after the deal closed in September, the majority ownership of the building was transferred to Shvo’s group, in a transaction that valued the building at $937 million. To close the deal, Shvo’s equity partner, BVK, purchased the majority stake owned by Nightingale’s partner, Wafra.

Now, as the JPMorgan loan nears expiration, Shvo’s partnership has tapped a JLL team led by Michael Tepedino with David Sitt, and Robert Tonnessen to secure financing by January 2020.

According to a person familiar, the building current has $47 million of contracted lease payments. The owners intend to keep the building as primarily office space and said planned upgrades are forthcoming, the person said.

JLL did not respond to a request for comment. Shvo’s partnership declined to comment.

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