The site of Manhattan’s retail lease of 2020 is now subject to a major refinancing.
Gazit Horizons, a subsidiary of Israeli investment firm Gazit Globe, has refinanced its retail property at 410 East 61st Street for $134.4 million in permanent credit term lease bond financing, Commercial Observer reported.
The bond was secured by both the retail property and the lease for the incoming Home Depot and is intended to generate a stronger profit on investment and hedge against interest rate increases, according to Gazit.
Mesirow Financial is responsible for issuing and placing the bonds per the structure of the credit term lease financing. The financing will carry a fixed-rate of 3.295 percent. Gazit generated approximately $30 million in proceeds on its initial investment from the refinancing.
Home Depot is set to move to the location after signing a 20-year lease for the property in October. Comprising 120,000 square feet, the lease was the largest in Manhattan in 2020 both in terms of size and rent. The company will be paying approximately double the rent paid by the previous tenant, Bed Bath & Beyond.
Gazit Horizons acquired its interest in the property over the course of two deals in 2017 and 2018 for approximately $80 million. The company is expected to deploy $20 million to prepare the property for Home Depot, which hopes to move into the space over the next couple of years.
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