Paramount Group preps for $850M refinance

Office REIT leans on lenders, looks for tenants at 1301 Sixth Avenue

New York /
Apr.April 29, 2021 02:08 PM
Paramount Group CEO Albert Behler and 1301 Avenue of the Americas. (Paramount)

Paramount Group CEO Albert Behler and 1301 Avenue of the Americas. (Paramount)

No tenants? No problem — at least, not yet.

Paramount Group’s CEO Albert Behler shrugged off the company’s 500,000-square-foot vacancy at 1301 Sixth Avenue, which the office REIT has marketed for a year. Barclays left the space, which takes up a third of the building, at the end of 2020.

“There is plenty of liquidity in the mezzanine debt market and no real distress,” said Behler.

Paramount Group will develop an “amenities center” in the 1.5 million-square-foot building to entice tenants, and refinance $850 million of debt on the property before the end of June, Behler said Thursday during the company’s first quarter earnings call.

1633 Broadway (Paramount)

Net income at the REIT was $1.88 million in the first quarter, down from $5.23 million during the same period last year. Few companies have hurried to lease new office space with most of their employees working from home. Paramount’s revenue declined $30 million last year compared to 2019; it has sold assets and cut costs to build up $488 million in cash.

Leasing activity is “nowhere close” to its pre-pandemic levels and landlords “fight for every deal out there,” according to Behler.

31 West 52nd Street (Paramount)

31 West 52nd Street (Paramount)

The company did notch some lease signings recently. Paramount worked with the Gershwin Theater to renew 156,000 square feet at 1633 Broadway. The theater is home to the hit musical “Wicked.” The renewal accounted for most of the 189,000 square feet the company leased in Q1, and foreshadowed New York City’s “return with gusto” from the pandemic, Behler said.

And just this month, Bracewell, a government consulting firm, signed a new lease for 54,000 square feet at 31 West 52nd Street. TD Bank will leave 130,000 square feet at the building this week, according to company managers.





    Related Articles

    arrow_forward_ios
    SL Green CEO Marc Holliday (Getty, Sl Green)
    SL Green shareholders cry foul on CEO bonus
    SL Green shareholders cry foul on CEO bonus
    The commercial market was hit hard by the pandemic, and property tax revenue is expected to fall 5 percent. (iStock)
    Tax bills show how much Covid devalued NYC real estate
    Tax bills show how much Covid devalued NYC real estate
    Richard Segal of Seavest Investment Group, David Marx of Marx Development Group and 902 Quentin Road in Brooklyn (Photos via Seavest Investment Group, Marx Development Group and VRMNY)
    Westchester firm buys $54M Brooklyn medical building
    Westchester firm buys $54M Brooklyn medical building
    Leisure and hospitality led job gains in May as employers hired 559,000 people last month, more than double the month prior. (iStock)
    Economic recovery quickens from crawling to merely slow
    Economic recovery quickens from crawling to merely slow
    Ron Perelman, Blackstone Group executive Tony James and 35-39 East 62nd Street (Getty, Google Maps)
    Tony James revealed as buyer of Ron Perelman’s defaulted debt
    Tony James revealed as buyer of Ron Perelman’s defaulted debt
    Triplemint CEO David Walker (Photos via Emily Assiran, Sasha Maslov, Triplemint, iStock)
    Triplemint moves forward with 3 new offices
    Triplemint moves forward with 3 new offices
    Asking rents for labs or research buildings have been on the rise (iStock)
    Investors pour $10B into life sciences real estate this year
    Investors pour $10B into life sciences real estate this year
    Manhattan’s office availability rate hit an all-time high in May. (Getty)
    Manhattan office availability keeps on climbing
    Manhattan office availability keeps on climbing
    arrow_forward_ios

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

    Loading...