UPDATE, Tuesday, Dec. 17, 2019, 6:30 p.m.: After a decade of growth in New York City real estate’s capital markets, the biggest financing deals are shrinking.
This year’s ranking of top 10 finance deals by The Real Deal found that major landlords are still refinancing existing properties more than securing funding for acquisitions. Notably, no Financial District buildings featured in the annual ranking.
There are exceptions, however, and one dealmaker stood out. Related Companies, after the grand opening of its new $25 billion neighborhood at Hudson Yards, went on to ink three of the four largest financing deals of the year.
The largest deal of the year was the $1.6 billion refinanced loan from Bank of America for One Bryant Park. That was almost a $700 million drop from the peak deal of 2017, when Morgan Stanley led a syndicate of banks to provide a $2.3 billion to Boston Properties to refinance the GM Building.
Other major dealmakers secured positions in the ranking, including Tishman Speyer and Moinian Group. But a few new firms also made an appearance this year. On the lending side, JPMorgan, Wells Fargo and Deutsche Bank featured on the top deals.
Source: A TRD analysis of Department of Finance records dated from Jan. 1 to Dec. 12, 2019. Refinancing deals with the same lenders lenders are the same were excluded.
1. One Bryant Park Tower, $1.6 billion
Bank of America led a refinancing of the One Bryant Park tower. The bank is the largest tenant in the Durst Organization building, which was recently appraised at $3.5 billion. The deal combines a $950 million commercial mortgage-backed securities loan from Bank of America and $650 million worth of public-assisted financing that dates to a decade ago. The financing in part replaces a prior deal from Bank of America and JPMorgan Chase.
2. 30 Hudson Yards condominium, $1.43 billion
For the past few years, Warner Media had been gearing up for its move from Columbus Circle to 30 Hudson Yards, in time for the new neighborhood’s grand opening. Then in August, Warner secured a deal to sell its 1 million-square-foot condominium back to the company that built it: Related Companies. In partnership with Allianz, Related secured a $1.43 billion CMBS loan from Deutsche Bank.
Warner entered a sale-leaseback agreement for a 15-year-term. Rent at the property was close to $75 a square foot.
The deal also marked another spurt of activity between Related and Deutsche, after the latter moved into Warner’s previous space at Columbus Circle.
3. 1633 Broadway, $1.25 billion
Paramount Group soared up the ranking this year by locking in a $1.25 billion refinancing of its 2.5-million-square-foot office building at 1633 Broadway. The real estate investment trust, led by Albert Behler, secured the loan from Goldman Sachs.
Just north of Times Square between West 50th and West 51st streets in Midtown, the Class A building has seen a roster of high-profile tenants walk through its doors, including Gannett and The Clinton Foundation.
In 2011, Paramount pushed its ownership stake in the building up to 75 percent when it recapitalized the property. The deal valued the building north of $2 billion.
4. 55 Hudson Yards, $1.245 billion
Yet another Hudson Yards deal, this transaction allowed its developers to cash out. Last month, a joint venture between Related Companies, Oxford Properties and Mitsui Fudosan America, locked in a $1.245 billion debt package backed by Wells Fargo, Deutsche Bank and Morgan Stanley.
The refinancing almost covers the cost of developing the 51-story office building, which totaled $1.3 billion.
The deal came shortly after Facebook agreed to take 1.5 million square feet across three Hudson Yards towers. At 55 Hudson Yards, where Facebook has 57,000 square feet, the tech giant is paying $116 per square foot and has seven months of free rent, according to a report by Kroll Bond Rating Agency.
5. 10 Columbus Circle, $1.1 billion
To round out Related’s glory lap in the ranking, the developer secured a massive debt package to refinance its office condominium at 10 Columbus Circle. The transaction coincided shortly after a major tenant changeover at the property.
Warner Media vacated the space and moved downtown to Related’s 30 Hudson Yards, and now Deutsche Bank is preparing to take over the space in January. It was granted naming rights as part of the agreement.
The $1.1 billion loan, secured by a venture led by Related, includes $725 million to refinance debt at the property, a $120 million building loan and a $255 million project loan. The loan was administered by Wells Fargo, documents show.
6. Jackson Park, $1 billion
In the largest financing deal for Queens and its towering Long Island City neighborhood, Tishman Speyer announced in September that it had secured a $1 billion loan to launch the second phase of a massive development there.
Jackson Park, as the project is known, is expected to feature 1,871 apartments across three buildings, a 1.5-acre private park and a 50,000-square-foot clubhouse. Tishman began work at the site in 2015.
Bank of America and Wells Fargo provided the debt — a 10-year, interest-only loan — in September. It replaced a $640 million construction loan provided in 2015 by the same lending group.
7. 4 Times Square, $900 million
As the Durst Organization was refilling its Midtown tower at 4 Times Square with tenants, the developer was also in the market for a $900 million loan to refinance the property.
The firm eventually secured the loan from a syndicate led by JPMorgan and Wells Fargo, allowing Durst to refinance a $650 million CMBS loan provided by UBS Bank that had matured.
Durst was faced with the arduous task of having to repopulating the 1.6 million-square-foot building after Conde Nast vacated it earlier in the decade and moved to Durst’s One World Trade. Over five years the landlord has ushered in a suite of tenants including National Cable Communications for 65,000 square feet, Analysis Group for 58,000 square feet, and BMO Capital Markets, an investment banking subsidiary of the Bank of Montreal, for a massive 215,000-square-foot lease.
However, Durst is losing one major tenant to a newer building. White-shoe law firm Skadden, Arps, Slate, Meagher & Flom, which had a 600,000-square-foot lease, is moving to Brookfield’s One Manhattan West next year.
8. One Soho Square, $900 million
Some buildings seem to age well. Earlier in the year, Stellar Management and Imperium Capital refinanced their development One Soho Square with a $900 million, five-year CMBS loan provided by Goldman Sachs.
The site, an office and retail project that’s over 90 percent leased, consists of two combined buildings: 15-story One Soho Square East, which was built in 1904, and 13-story One Soho Square West, constructed in 1927.
Stellar acquired the two buildings — 161 Sixth Avenue and 223 Spring Street — in 2012 for $200 million, then invested $50 million into the properties to create a joint lobby. The buildings have attracted a suite of hip tenants, including eyewear company Warby Parker and beauty brands MAC Cosmetics, Aveda and Glossier. Trader Joe’s is also there.
9. Crown Building office condominium, $807.5 million
Fifth Avenue was a hotspot for transactions this year, but only the Crown Building secured a debt package big enough to make the top 10 of 2019.
A partnership between Jeff Sutton’s Wharton Properties and Brookfield Asset Management, which own the bottom floors and retail space at the property, secured an $807.5 million loan from Apollo Global Management, paying between 3 percent and 3.5 percent interest. The new loan will refinance $720 million in debt backing the commercial portion of the property.
A partnership led by Wharton acquired the iconic property in 2015 for $1.8 billion from Eliot Spitzer’s Spitzer Enterprises. Soon after, Wharton sold the top 20 floors of the building to developers Michael Shvo and Vladislav Doronin for $500 million.
10. 711 Fifth Avenue, $700 million
JPMorgan Chase provided a $700 million loan for the Coca-Cola building’s first change of hands this year. Nightingale Properties, Ashkenazy Acquisitions and Wafra Capital Partners acquired the property from the soda giant in August for $907 million — a sale that was to involve a loan from Natixis, which later backed out. A month after the deal closed, Wafra sold its interest in the property to Michael Shvo and his partners, in a transaction that valued the property at $937 million.
Correction: This article was updated to correct the loans in the No. 1 and No. 10 spots on the list.