SL Green Realty landed a $1.25 billion construction loan for its One Madison Avenue office redevelopment, the largest office construction financing package of the year.
The real estate investment trust, which is developing the building in partnership with the National Pension Service of Korea and Hines, announced the loan Monday.
The loan was provided by a consortium of banks including Wells Fargo, TD Bank, Goldman Sachs, Bank of America, Deutsche Bank and Axos Bank.
“Despite the headwinds presented by current and temporary challenges, we remain focused on boosting the New York City economy by creating thousands of construction jobs and bringing a new, best-in-class office tower to the highly sought-after Flatiron/Midtown South submarket for the first time in a decade,” said Marc Holliday, chairman and CEO of SL Green in a statement.
Construction kicked off on Monday with a ceremony attended by Mayor Bill de Blasio — who called the groundbreaking “a sign of [New York City’s] strength — as well as Manhattan Borough President Gale Brewer, and City Councilmember Carlina Rivera.
The six-year loan has a floating interest rate of 3.35 percent above LIBOR, with the ability to reduce the spread to as low as 2.5 percent upon achieving certain leasing and completion milestones, according to SL Green.
The project occupies the full-block site between Park and Madison avenues and East 23rd and East 24th Streets, and is expected to span 1.4 million square feet and cost $2.3 billion.
In May, SL Green sold 49.5 percent of its interest in One Madison Avenue to Hines and the National Pension Service of Korea in a joint venture partnership. Those two firms have committed at least $492.2 million in equity to the project.
The three companies also partnered on One Vanderbilt, the massive office tower next to Grand Central Terminal, which opened in September.